Recently, the wide application of upconversion nanoparticles (UCNPs) in the field of bioimaging has raised the requirement of biocompatibility. Current cytocompatibility studies on UCNPs mainly focus on cancer cells; however, their potential effects on normal cells are rarely addressed. Herein, the cellular effects of a trace amount of ligand-free NaYF4:Yb/Er nanocrystals on the differentiation of rat bone mesenchymal stem cells (rBMSCs) were investigated. First, due to their excellent upconversion fluorescent properties, the cellular uptake of ligand-free NaYF4:Yb/Er nanocrystals was confirmed by confocal laser scanning microscopy, and a homogeneous cytoplasmic distribution was imaged. Second, the viability of the rBMSCs cultured with a series of concentrations of nanoparticles (0, 30, 300, and 3000 ng ml-1) was evaluated, and a dose threshold was determined. Third, the effects of ligand-free NaYF4:Yb/Er nanocrystals on the osteogenesis of the rBMSCs were intensively characterized. The alkaline phosphatase activity assay, quantitative real time polymerase chain reaction for related osteogenic genes, and immunofluorescence staining of specific biomarkers and mineral deposits demonstrated that the ligand-free NaYF4:Yb/Er nanocrystals at a proper concentration can enhance osteogenic differentiation. Finally, intracytoplasmic lipid detection showed that the adipogenic differentiation of rBMSCs might be inhibited in the presence of ligand-free NaYF4:Yb/Er nanocrystals. Meanwhile, these results showed that the effects of ligand-free NaYF4:Yb/Er nanocrystals on rBMSCs were concentration-dependent and reciprocal between osteogenic and adipogenic differentiation. This work provides new insights into the exploring the biocompatibility of UCNPs and will benefit the research community engaged in nanotechnology and biomedicine.