Lanthanide-doped upconversion nanoparticles have emerged as a superior and promising nanomaterial due to their unique luminescent properties, nil-background noise, and low toxicity. However, conventional synthetic methods for preparing these nanoparticles yield hydrophobic nanoparticles, which result in poor hydrophilicity and greatly limited their applications, especially in the biological field. In this review, we overview the commonly utilized and newly developed preparation methods for the surface modification of upconversion nanoparticles. In particular, we highlight the different types of polymers used in modification of these nanoparticles. Parallel efforts are devoted to the applications of these polymer modified upconversion composites, including bioimaging, tumor therapy, drug delivery, bioassay and three-dimensional displays.