Lanthanide doped nanocrystalline fluoride optical materials have been explored for diverse applications in the solar energy harvesting, industry, medical, forensic and biological fields because of high photoluminescence quantum yield and low phonon energy. In this manuscript, Er3+/Yb3+:BaYF5 nanocrystals were synthesized by hydrothermal process. These nanocrystals were investigated through X-ray diffraction (XRD), SEM/TEM, Raman, quantum yield, photoluminescence upconversion (UC) and downconversion (DC) studies. XRD patterns exhibited the cubic phase and no phase deviation with the addition of Er3+ and Yb3+ ions. The TEM images illustrate the cubic-like morphologies of the obtained nanocrystals. Raman spectrum unveils the characteristic vibrational bands with an intense band at 498 cm−1, which is considered the phonon energy of the BaYF5 matrix. Under 488 nm excitation, the near infrared (NIR) emission of Er3+ increases up to 5 mol% and then decreases for a 10 mol% doped sample. Photoluminescence DC quantum yield of Er3+/Yb3+:BaYF5 sample is measured by using integrating sphere in the visible region under 488 nm (Xe flash lamp) excitation, is 4.25%. Under 900 nm laser excitation, intense NIR emissions at 978 and 1550 nm corresponding to Yb3+ (2F5/2 → 2F7/2) and Er3+ (4I13/2 → 4I15/2) ions, respectively, were observed. With the increase of Yb3+ concentration, the NIR emissions of both Er3+ and Yb3+ increase to 5 mol% and then decrease to 10 mol%. The strength of green UC emission of Er3+ decreases with increase of Er3+ concentration, whereas it enhances with the rise of Yb3+ concentration under 980 nm laser excitation. Two-photon UC process is confirmed as the slopes of the green, and red intensities are 2 and 2. These nanocrystals exhibit intense UC and DC emissions under 980 nm and 480 nm, respectively, which can be suitable for improving the efficiency of solar cells.