Aqueous, dispersible, luminescent YPO_4:Eu³⁺-K⁺ and hybrid magneticluminescent Fe₃O₄@YPO_4:Eu³⁺-K⁺ nanoparticles are prepared at an optimum temperature with a simple synthesis route. The shape of YPO_4:Eu³⁺-K⁺ nanoparticles is found to be nanorods. Photoluminescence spectrum of a sample upon excitation at 395 nm shows the characteristic peaks of Eu³⁺ such as magnetic−dipole transition (⁵D₀→⁷F₁) at 592 nm, the electric−dipole transition (⁵D₀→⁷F₂) at 615 nm, and electric−dipole transition (⁵D₀→⁷F₄) at 695 nm. Luminescence intensity increases with K⁺ doping. Interestingly, their luminescence intensities are almost the same. This could be explained by the polarizability effect of the PO₄³⁻ group and K⁺ upon emission of Eu³⁺. This high intensity at 695 nm will be useful in bioimaging since this wavelength falls in biological window I. This hybrid material shows a hyperthermia temperature under an AC magnetic field, making this material a potential candidate for cancer therapy.