Organic-inorganic hybrid sol-gel materials have attracted increasing attention in recent years as low-cost, rugged materials for integrated optical devices such as optical couplers, splitters, and electro-optic modulators. These materials can be easily processed by spin-coating, wet-etching photolithography, and low-temperature baking. Precise control of waveguide core-cladding refractive indices produces well-confined low-loss propagation and good matching of the absolute refractive index to that of fused silica results in low optical coupling loss to optical fiber. The increased thermal and mechanical stability of these materials, relative to optical polymers, results in numerous packaging options and improved reliability. However organic-inorganic hybrid sol-gel materials have not yet been often used as host of active dopants such as erbium (III) ions for 1550nm optical amplification. This limitation owes primarily to matrix and chelate dominated nonradiative relaxation processes, as high phonon energy OH and OH-like oscillators can bridge off the energy from the excited erbium (III) ions at very high rates. Different strategies have been proposed to protect erbium (III) ions from matrix and chelate quenching, including host and ligand fluorination, and inorganic microstructure shielding. Here we report on our work of encapsulating erbium (III) ions in transparent, refractive index matched, and highly re-dispersible lanthanum phosphate nanoparticles and the work of examining the optical properties of these nanoparticles as active dopants in organic-inorganic hybrid sol-gels adopting 2-methacryloxypropyl trimethoxysilane (MAPTMS) as a precursor. 980nm laser pumped photoluminescence at 1535nm was obtained from solid bulk samples of 300mg La.99Er.01PO4 nanoparticles doped in 1mL hybrid sol-gel. Thick bulk samples of this composition exhibited exceptional clarity and little trace of nanoparticle scattering effects. The lifetime of the nanoparticle doped hybrid sol-gel composite was measured to be 220μs, indicating an intermediate relaxation rate between that of an erbium organic complex and annealed erbium doped glass. La.99Er.01PO4 nanoparticle doped hybrid sol-gel films were also prepared and the refractive index was measured to be 1.4966 at 1550nm, which is very close to that of optical fiber and provides a suitable index difference from an undoped and metal oxide tuned sol-gel at 1.4870 to comprise an efficient single-mode waveguide system.