The NaYF4:Yb3+,Tb3+ (x Yb: 0.20, x Tb: 0.04) materials were prepared by the co-precipitation method. The as-prepared material was washed with and without water and thereafter annealed at 500 °C. This resulted in materials with moderate (with water) and very high (without water) up-conversion luminescence intensity. The structural details causing the differences in luminescence intensity were investigated at room temperature with X-ray powder diffraction and Rietveld analyses. All materials crystallized in the hexagonal form (P63/m, No. 176, Z: 1.5) with a composition very close to stoichimetric. The local structural details revealed microstrains in the rare earth sublattice that were relaxed for the material with very high up-conversion luminescence intensity thus decreasing energy losses and enhancing up-conversion.