In the current study, we modified the surface of Tb(OH)₃ nanoparticles with a silica layer to enhance their solubility and biocompatibility. Transmission electron microscopy confirmed the improvements in these properties. Tb(OH)₃@SiO₂ core–shell nanoparticles (TS-CSNPs) exhibited a strong green emission peak upon irradiation with ultraviolet light, which originates from the electric-dipole transition ⁵D₄ → ⁷F₅ (543 nm) of the Tb³⁺ ion. In vitro anticancer and antimicrobial activities of the synthesized TS-CSNPs has been evaluated through their potential cytotoxicity and antibacterial activity. TS-CSNPs were shown to have more cytotoxicity against HT29 human colorectal cancer cells with a value of IC₅₀ 420.33 in an MTT assay. The alteration of the morphological features of HT29 cells was analysed using various concentrations of TS-CSNPs by inverted microscopy. Western blot analysis results of the apoptotic pathway showed that TS-CSNPs inhibited the growth of HT29 cancer cells through the induction of apoptosis, as evidenced by the down regulation of the expression of anti-apoptotic Bcl-2 and Bcl-xL gene products. Furthermore, the results of the in vitro hemolysis assay with human erythrocytes demonstrated the excellent blood biocompatibility of TS-CSNPs. Our silica coated TS-CSNPs exhibited a non-significant effect on the viability of both Gram negative and Gram positive bacterial strains up to 18 hours of exposure. These results highlight that modified TS-CSNPs can be functionalized to enhance the efficacy of cancer therapeutics due to the significant potential against cancerous cells and antibacterial activity.