Gadolinium (Gd) doped upconversion nanoparticles (UCNPs) have been well documented as T1-MR and fluorescent imaging agents. However, the performance of Gd3+ ions located differently in the crystal lattice still remains debatable. Here, a well-designed model was built based on a seed-mediated growth technique to systematically probe the longitudinal relaxivity of Gd3+ ions within the crystal lattice and at the surface of UCNPs. We found, for the first time, a nearly 100% loss of relaxivity of Gd3+ ions buried deeply within crystal lattices (> 4 nm), which we named a “negative lattice shielding effect” (n-LSE) as compared to the “positive lattice shielding effect” (p-LSE) for the enhanced upconversion fluorescent intensity. As-observed n-LSE was further found to be shell thickness dependent. By suppressing the n-LSE as far as possible, we optimized the UCNPs' structure design and achieved the highest r1 value (6.18 mM−1s−1 per Gd3+ ion) among previously reported counterparts. The potential bimodal imaging application both in vitro and in vivo of as-designed nano-probes was also demonstrated. This study clears the debate over the role of bulk and surface Gd3+ ions in MRI contrast imaging and paves the way for modulation of other Gd-doped nanostructures for highly efficient T1-MR and upconversion fluorescent bimodal imaging.