We show the annealing effect on silver and Erbium- doped tellurite glasses in the formation of nanoparticles (NPs) of silver, produced by the reduction of silver (Ag+→Ag0), aiming to an fluorescence enhancement. The absorption spectra show typical Localized Surface Plasmon Resonance (LSPR) band of Ag0 NP in addition to the distinctive absorption peaks of Er3+ ions. Both observations demonstrate that the photoluminescence enhancement is due to the coupling of dipoles formed by NPs with the Er3+4I13/2→4I 15/2 transition. This plasmon energy transfer to the Er3+ ions was observed in the fluorescence spectrum with a blue-shift of the peaks. © 2010 Optical Society of America.