A facile strategy using cheap and readily available precursors has been successfully developed for the synthesis of rare-earth doped hexagonal phase NaYF4 nanocrystals with uniform shape and small particle size as well as strong photoluminescence. Due to their optical properties and good biocompatibility, these multicolor nanocrystals were successfully used as a bio-tag for cancer cell imaging. This novel synthetic method should also be capable of extension to the synthesis of other fluoride nanocrystals such as YF3 and LaF3.