Upconverting nanoparticles (UCNPs) have recently shown great potential as contrast agents in biological applications. In developing different UCNPs, the characterization of their quantum yield (QY) is a crucial issue, as the typically drastic decrease in QY for low excitation power densities can either impose a severe limitation or provide an opportunity in many applications. The power density dependence of the QY is governed by the competition between the energy transfer upconversion (ETU) rate and the linear decay rate in the depopulation of the intermediate state of the involved activator in the upconversion process. Here we show that the QYs of Yb3+ sensitized two-photon upconversion emissions can be well characterized by the balancing power density, at which the ETU rate and the linear decay rate have equal contributions, and its corresponding QY. The results in this paper provide a method to fully describe the QY of upconverting nanoparticles for arbitrary excitation power densities, and is a fast and simple approach for assessing the applicability of UCNPs from the perspective of energy conversion. © 2013 The Royal Society of Chemistry.