We report on a polyethylenimine (PEI) covalently conjugated (alpha-NaYbF4:Tm3+)/CaF2 upconversion nanoparticle (PEI-UCNP) and its use for labeling rat mesenchymal stem cells (rMSCs). The PEI-UCNPs absorb and emit near-infrared light, allowing for improved in vivo imaging depth over conventional probes. We found that such covalent surface conjugation by PEI results in a much more stable PEI-UCNP suspension in PBS compared to conventional electrostatic layer by layer (LbL) self-assembling coating approach. We systematically examined the effects of nanoparticle dose and exposure time on rat mesenchymal stem cell (rMSC) cytotoxicity. The exocytosis of PEI-UCNPs from labeled rMSCs and the impact of PEI-UCNP uptake on rMSC differentiation was also investigated. Our data show that incubation of 100-microg/mL PEI-UCNPs with rMSCs for 4 h led to efficient labeling of the MSCs, and such a level of PEI-UCNP exposure imposed little cytotoxicity to rMSCs (95% viability). However, extended incubation of PEI-UCNPs at the 100 microg/mL dose for 24 hour resulted in some cytotoxicity to rMSCs (60% viability). PEI-UCNP labeled rMSCs also exhibited normal early proliferation, and the internalized PEI-UCNPs did not leak out to cause unintended labeling of adjacent cells during a 14-day transwell culture experiment. Finally, PEI-UCNP labeled rMSCs were able to undergo osteogenic and adipogenic differentiation upon in vitro induction, although the osteogenesis of labeled rMSCs appeared to be less potent than that of the unlabeled rMSCs. Taken together, PEI-UCNPs are promising agents for stem cell labeling and tracking.