The photoluminescence properties of Yb doped Y2O3 nanoparticles were investigated in visible region to resolve the origin of dissimilar fluorescence peaks at different excited wavelengths and to explore possible use of Yb: Y2O3 for white light emission, excited by available near UV LED. The peak observed at 370 nm in photoluminescence excitation spectrum is due to expected transition of electrons from 2 F7/2 to charge transfer band (CTB) associated with non-centrosymmetric C2 centers however, the excitation peak at 335 nm is due to transition of electrons from 2 F7/2 to the CTB associated with distorted centrosymmetric C3i centers. The Yb doping in nano Y2O3 not only modify the CTB but also helps in transition of electron from these CTBs to ground 2 F5/2 and 2 F7/2 levels of Yb. Strong broad emission peak is observed at 503 nm which is assigned to transition from distorted CTB (C3i) to 2 F5/2 energy levels. The findings are important because broad emission (from ~400 to ~650 nm) at 335 nm excitation (available AlGaN LED wavelength) due to C2 and C3i centers in Yb: Y2O3 may be used for white light emission applications.