Developing a rapid and continuous synthesis method for scalable production of upconversion nanoparticles (UCNPs) plays an important role in the applications of advanced color display, high-resolution biomedical imaging and precise optical thermometry. Here, for the first time, we report the multicolor tunable upconversion luminescence (UCL) in Y2O3:Yb3+/Er3+ (x/1 mol%) UCNPs with the average size of ∼14 nm, which were successfully fabricated by liquid-fed flame aerosol synthesis with a high production rate of ∼40 g h−1. Under the excitation of 980 nm continuous-wave (CW) laser, the UCL color can be efficiently modulated from green to red and the red-to-green (R/G) UCL intensity ratio is enhanced dramatically as the doping concentration of Yb3+ ions increases from 1 to 15 mol%. The UCL color manipulation can be ascribed to the cross-relaxation (CR) and the energy back transfer (EBT) processes between Yb3+ and Er3+ ions, and it was proved by investigating the dependence of UCL on the pump power and the decay lifetimes of 4S3/2 and 4F9/2 states. Moreover, the coefficients of CR and EBT processes were also calculated by a rate equation model, and the results suggest that they are efficient in Y2O3 host. In addition, the optical thermal sensing performance was also evaluated by analyzing fluorescence intensity ratio (FIR) of the thermally coupled levels (2H11/2, 4S3/2) of Er3+ ions in Y2O3:Yb3+/Er3+ (1/1 mol%) UCNPs, achieving an excellent thermal sensitivity of 0.0196 K−1 at 543 K.