Nanomaterials have gained considerable attention and interest in the development of novel and high-resolution contrast agents for medical diagnosis and prognosis in clinic. A classical urea-based homogeneous precipitation route that combines the merits of in situ thermal decomposition and surface modification is introduced to construct polyethylene glycol molecule (PEG)-decorated hybrid lutetium oxide nanoparticles (PEG–UCNPs). By utilizing the admirable optical and magnetic properties of the yielded PEG–UCNPs, in vivo up-conversion luminescence and T1-enhanced magnetic resonance imaging of small animals are conducted, revealing obvious signals after subcutaneous and intravenous injection, respectively. Due to the strong X-ray absorption and high atomic number of lanthanide elements, X-ray computed-tomography imaging based on PEG–UCNPs is then designed and carried out, achieving excellent imaging outcome in animal experiments. This is the first example of the usage of hybrid lutetium oxide nanoparticles as effective nanoprobes. Furthermore, biodistribution, clearance route, as well as long-term toxicity are investigated in detail after intravenous injection in a murine model, indicating the overall safety of PEG–UCNPs. Compared with previous lanthanide fluorides, our nanoprobes exhibit more advantages, such as facile construction process and nearly total excretion from the animal body within a month. Taken together, these results promise the use of PEG–UCNPs as a safe and efficient nanoparticulate contrast agent for potential application in multimodal imaging.