The effects of Yb2O3 concentration on upconversion luminescence spectra of Tm3+/Yb3+-codoped oxyhalide tellurite glasses were studied, and upconversion luminescence mechanism of Yb3+ sensitize Tm3+ in oxyhalide tellurite glasses was analyzed. The results showed that intense blue (475 nm) and weak red (649 nm) emission corresponding to the 1G4→3H6 and 1G4→3F4 transitions of Tm3+, respectively, were simultaneously observed at room temperature under 980 nm laser diode (LD) excitation. Upconversion mechanism analysis showed that a two-photon upconversion process is assigned to the blue and red emission; with increasing Yb2O3 concentration, the lifetime of Yb3+ decreases, the energy transfer efficiency of Yb3+ to Tm3+ increases, upconversion blue and red emission intensities first increase, reach its maximum at molar ratio 3 of Yb2O3 concentration, and then decrease. It is considered that the concentration quenching of Yb3+ is due to energy back-transfer of 3H4 (Tm3+)→2F5/2(Yb3+). The results showed that Yb3+-sensitized Tm3+-doped oxyhalide tellurite glasses can be used as a kind of potential host materials for upconversion blue lasers.