Chloroform soluble luminescent undoped and europium doped LaPO4 nanoparticles (NPs) were synthesized by oleic acid mediated solvothermal technique at low temperature (150 oC). These NPs have nanorod (NR) shape as confirmed by Transmission electron microscopy (TEM) and monoclinic phase as confirmed by X-ray diffraction (XRD) measurement. Fourier transform infrared (FTIR) studies shows that oleic acid is bound to the surface of NRs. The Photoluminscence (PL) spectroscopy suggests that the undoped LaPO4 emits violet blue light when excited by UV-light due to the surface oleate groups. In the doped NRs, oleate group serves as a sensitizer for the surface Eu3+ ions. In order to increase the emission output of these NRs, 2-theonoyltrifluoroacetonate (TTA) is used to sensitize the emission of surface Eu3+ ions. PL spectroscopy and lifetime measurements clearly show that sensitization takes place only on the surface of the NRs while the core Eu3+ ions remains unsenesitized. The emission output is increased 33 times as compared to the unsensitized NRs. Further, these NRs were transferred from organic to the aqueous phase by citric acid. The NPs thus obtained are redispersible in water with good colloidal stability. Here, also sensitization of surface europium ions occurs in aqueous solution by TTA ligand. These luminescent organic and water soluble NRs further strengthen the application in the fields of optical display, lighting and bioimaging.