Series of Er³⁺‐activated Bi₅IO₇ upconverting microparticles are prepared by using a wet chemical technology along with a dedicated heating process. The electronic structure of the Bi₅IO₇ host is systematically studied by employing the first‐principle density functional theory. The near‐infrared (NIR) triggered upconversion (UC) behaviors of the prepared samples are studied and the optimal doping content for Er³⁺ ions is determined to be 7 mol%. The involved luminescent mechanism is verified by the pump power dependent UC emission spectra. Through the fluorescence intensity rate route based on the ²H_11/2 and ⁴S_3/2 thermally coupled levels, the thermometric properties of the final compounds are investigated in detail. The maximum absolute and relative sensor sensitivities of the resultant microparticles are 0.0069 K^‐1 and 1.36% K^‐1, respectively, importantly, these values are independent on the Er³⁺ ion content. The photocatalytic activity of the resultant microparticles are evaluated by analyzing the degradation of RhB under the irradiation of visible and NIR light. The results demonstrate that the Er³⁺‐activated Bi₅IO₇ microparticles are promising bifunctional platforms for optical thermometers and visible‐NIR light triggered photocatalysis.