ZnO:Er³⁺–Yb³⁺@Gd₂O₃ nanostructures were obtained by “wet” chemistry methods – the sol–gel technique for the preparation of ZnO and ZnO:Er³⁺–Yb³⁺ nanoparticles (NPs), and the seed deposition method for obtaining Gd₂O₃. The crystal structure, morphology, phase and elemental composition, resonant microwave absorption of rare earth ions, point defects in the ZnO:Er³⁺–Yb³⁺@Gd₂O₃ crystal structure and up-conversion luminescence were investigated by X-ray diffraction (XRD), scanning electron microscopy (SEM) with energy dispersive X-ray (EDX), X-ray photoelectron spectroscopy (XPS), electron paramagnetic resonance (EPR) spectroscopy, and optical spectroscopy. The crystallization temperature (600 °C) of the Gd₂O₃ phase on the ZnO surface was found. As-obtained ZnO:Er³⁺–Yb³⁺ NPs (with size ∼7 nm) are highly crystalline and monodispersed. ZnO:Er³⁺–Yb³⁺ NPs annealing at 900 °C leads to the formation of highly polydispersed ZnO:Er³⁺–Yb³⁺ NPs, covered by a Gd₂O₃ shell. The process of the incorporation of the rare earth ions into the ZnO structure, as well as the effect of Gd₂O₃ content on the morphology and visible up-conversion (UC) luminescence in ZnO:Er³⁺–Yb³⁺ matrices were studied