Localized surface plasmon (LSP) effects due to Ag and Ag/SiO2 nanoparticles (NPs) deposited on GaN/InGaN multiquantum well (MQW) light-emitting diode (LED) structures are studied. The colloidal NPs are synthesized by a sol-gel method and drop-cased on the LED structures. The surface density of NPs its controlled by the concentration of the NP solution. Theoretical modeling is performed for the emission spectrum and the electric field distribution of LSP resonance for Ag/SiO2 NPs. Enhanced photoluminescence (PL) efficiency is observed in the LED structures and the amount of PL enhancement increases with increasing the surface density of Ag and Ag/SiO2 NPs. These effects are attributed to resonance coupling between the MQW and LSP in the NPs. It is also shown that the PL enhancement attainable with Ag NPs and Ag/SiO2 NPs is comparable, but the latter displays a much higher stability with respect to long-term storage and annealing due to a barrier for NP agglomeration, Ag oxidation, and impurity diffusion provided by the SiO2 shell.