Wearable sensors with multiple functions are attracting significant attention due to their broad applications in health monitoring and human-computer interaction. Despite significant progress in wearable sensors, it is a significant challenge to monitor temperature and stress simultaneously with a single sensor. A wearable multifunctional optical sensor based on Er3+/Yb3+ co-doped Gd2O3 nanoparticles and a tapered U-shaped fiber is proposed to monitor both temperature and stress in this paper. Temperature resolution of about 0.16℃ is achieved by monitoring the fluorescence intensity ratio (FIR) around 562 nm and 522 nm emitted by Er3+/Yb3+ co-doped Gd2O3 phosphors, which are integrated in a single-mode fiber (SMF). The stress measurement is obtained by monitoring the fluorescence intensity change around 522 nm, which is insensitive to temperature. The results show that the pressure sensitivity and low detection limit are 7% kPa-1 and 127 Pa, respectively. In addition, the response time of 20 ms are achieved for stress sensing. As a proof-of-concept, human skin temperature and heart and respiratory rates are detected before and after exercise by positioning the sensing probe on the wrist. Furthermore, heart and respiratory rates in different parts of the body are also monitored, which are in good agreement with one another. The results demonstrate that the proposed wearable multifunctional optical sensor has huge potential for health monitoring.