The potential of upconversion nanoparticles (UCNPs) in various biomedical applications, including immunoassays, biomedical imaging, and molecular sensing, requires their surface derivatized to be hydrophilic and biocompatible. Here, a new family of compact zwitterionic ligand systems composed with functional phospholipids was designed and used for the surface modification of UCNPs. The zwitterionic UCNPs are hydrophilic, compact, and easily functionalized. It was proved that zwitterionic phospholipids could provide UCNPs with not only extended pH and salt stability but also little nonspecific interactions to positively and negatively charged proteins, low nonspecific adhesion in live-cell imaging process. Most notably, the efficient in vivo tumor imaging performance and long blood circulation half-life suggests the excellent biocompatibility for in vivo imaging of the zwitterionic UCNPs.