Lanthanide-doped luminescent nanoparticles are an appealing system for many applications in the area of biomedical, solar cell, thermometry, anti-counterfeiting, etc. due to their sensitivity, reliability, high photochemical stability, and high optical transparency in the visible-NIR range. A color-tunable upconversion-luminescence (UCL) in a new low phonon energy ThO₂ host based on modulating sensitizer concentration has been realized in this work and it may work as a potential candidate to replace corrosive and toxic fluoride based hosts in the future. Er³⁺–Yb³⁺ co-doped thoria nanoparticles were prepared using a gel combustion route and their structural and luminescence properties were determined as a function of the Yb³⁺ concentration. Phonon dispersion measurements have established the dynamic structural stability of the thoria nanoparticles. Density functional theory (DFT) was used to calculate the defect formation energy, highlighting the feasibility of dual ion (Er³⁺ and Yb³⁺) doping in thoria. The morphology and average size of the doped thoria was studied using high resolution transmission electron microscopy (HRTEM), and any defects evolving as a result of aliovalent doping were probed using positron annihilation lifetime spectroscopy (PALS). With 980 nm laser excitation, the nanothoria emits green and near-red light. A significant enhancement of the red-to-green intensity ratio of Er³⁺ ions in nanothoria was observed with an increase in Yb³⁺ concentration which resulted in beautiful color tunability from green to yellow light in going from lower (up to ∼5 mol%) to higher (10 and 15 mol%) Yb³⁺ concentration. The power dependence and the dynamics of the upconverted emission confirm the existence of two-photon upconversion processes for the green and red emissions.