Upconversion luminescent β-NaYF4:Yb3+, Er3+ nanoparticles (UCNPs) were encapsulated with uniform mesoporous silica shells, which were further modified with poly(ethylene glycol) (PEG) and cancer-targeting ligand folic acid (FA), resulting in the formation of water-dispersible and biologically functionalized core-shell structured UCNPs@mSiO2 nanoparticles with an overall average size of around 80 nm. The obtained multifunctional nanocomposite spheres can be performed as an anti-cancer drug delivery carrier and applied for cell imaging. It is found that anti-cancer drug doxorubicin hydrochloride (DOX) can be absorbed into UCNPs@mSiO2-PEG/FA nanospheres and released in a pH-sensitive pattern. In vitro cell cytotoxicity tests on cancer cells verified that DOX-loaded UCNPs@mSiO2-PEG/FA nanospheres exhibited greater cytotoxicity with respect to free DOX and DOX-loaded UCNPs@mSiO2-PEG at the same concentrations, owing to the increase of cell uptake of anti-cancer drug delivery vehicles mediated by the FA receptor. Moreover, the upconversion luminescence image of UCNPs@mSiO2-PEG/FA taken up by cells shows green emission under 980 nm infrared laser excitation, making the UCNPs@mSiO2-PEG/FA nanocomposite spheres promising candidates as bioimaging agents. These findings highlight the promise of the highly versatile multifunctional nanoparticles for simultaneous imaging and therapeutic applications.