Paramagnetic gadolinium (Gd-III)-ion-doped upconversion nanoparticles (UCNPs) are attractive optical-magnetic molecule imaging probes and are a highly promising nanoplatform for future theranostic nanomedicine design. However, the related relaxivity mechanism of this contrast agent is still not well understood and no significant breakthrough in relaxivity enhancement has been achieved. Here, the origin and optimization of both the longitudinal (r1) and transverse (r2) relaxivities are investigated using models of water soluble core@shell structured Gd3+-doped UCNPs. The longitudinal relaxivity enhancement of the nanoprobe is demonstrated to be co-contributed by inner-and outer-sphere mechanisms for ligand-free probes, and mainly by outer-sphere mechanism for silica-shielded probes. The origin of the transverse relaxivity is inferred to be mainly from an outer-sphere mechanism regardless of surface-coating, but with the r2 values highly related to the surface-state. Key factors that influence the observed relaxivities and r2/r1 ratios are investigated in detail and found to be dependent on the thickness of the NaGdF4 interlayer and the related surface modifications. A two orders of magnitude (105-fold) enhancement in r1 relaxivity and 18-fold smaller r2/r1 ratio compared to the first reported values are achieved, providing a new perspective for magnetic resonance (MR) sensitivity optimization and multimodality biological imaging using Gd3+-doped UCNPs.