Fast and significant progress has been achieved in the development of new biomarkers in recent years providing promising approaches for the reliable detection of diseases at an early stage. Yet, the disadvantages of commonly used markers, including photobleaching, autofluorescence, phototoxicity, and scattering, when ultraviolet or visible light is used for excitation, need to be overcome. Lanthanide-doped host materials are well known for their excellent optical properties, such as their ability to (up)convert near-infrared excitation to higher energies spanning the ultraviolet, visible, and near-infrared regions or to undergo strong near-infrared luminescence following near-infrared excitation. Their application as biomarkers may overcome the aforementioned drawbacks of conventional dyes. Thus, lanthanide-based nanostructures are highly promising candidates for cellular and small animal imaging, while the assessment of their cytotoxicity remains a crucial issue. Recent developments in the field of upconversion and near-infrared bioimaging focusing on some of the latest results obtained in in vitro and in vivo studies assessing the toxicity of lanthanide-based nanophosphors are highlighted in this review.