This feature article highlights the new development and current status of rare-earth (RE) based core-shell nanocrystals, which is one of the new classes of hybrid nanostructures. Attractive properties of rare-earth based nanomaterials include extremely narrow emission bands, long lifetimes, large Stoke's shifts, photostability and absence of blinking that can be exploited for biophotonic and photonic applications. Core-shell nanostructures have been attracting a great deal of interest to improve the luminescence efficiency by the elimination of deleterious cross-relaxation. The main focus of this feature article is to address the impacts of core-shell structures on the properties of lanthanide based nanocrystals including crystal phase, lattice strain, downconversion emission, upconversion emission and energy transfer. We describe general synthetic methodologies to design core-shell nanostructure materials. An interesting finding reported is that the local environment of an ion in the core-shell structure significantly affects the modifications of radiative and nonradiative relaxation mechanisms. Finally, a tentative outlook on future developments of this research field is given. Here, we attempt to identify the critical parameters governing the design of luminescent lanthanide based core-shell nanostructures.