Achieving efficient photodynamic therapy (PDT) in deeper biological tissue is still the biggest bottleneck that limits its widespread application in clinic. Although deeper biological tissue PDT could be realized through a combination of upconversion nanoparticles with a photosensitizer, issues with particle-size-induced upconversion fluorescence (UF) reduction and the related in vivo toxicity still cannot be solved properly. In this study, we synthesized Y₁Rs-ligand [Pro³⁰, Nle³¹, Bpa³², Leu³⁴]NPY(28–36) (NPY)-modified and photosensitizer MC540-loaded LiLuF₄:Yb,Er@nLiGdF₄@mSiO₂ multifunctional nanocomposites (MNPs) with a core–multishell structure and ultrasmall size. Their in vitro and in vivo breast tumor targeting, trimodality imaging performance, PDT therapeutic efficacy, and acute toxicity were evaluated. Our results demonstrated that the core–multishell MNPs(MC540) could achieve excellent UF imaging, and that doping with Gd³⁺ and Lu³⁺ rare earth ions could enhance the MR and CT imaging performance. In addition, the mSiO₂ shell provided a higher loading rate for the photosensitizer MC540, and the DSPE-PEG thin layer coating outside the MNPs(MC540) further improved the water solubility and biocompatibility, reducing the acute toxicity of the nanocomposites. Finally, the NPY modification enhanced the targetability of MNPs(MC540)/DSPE-PEG-NPY to breast tumors, improving the trimodality UF, CT, and MR imaging performance and PDT efficacy for Y₁-receptor-overexpressed breast cancer. In general, our developed multifunctional nanocomposites can serve as a theranostic agent with low toxicity, providing great potential for their use in clinical breast cancer diagnosis and therapy.