Abstract Tuning the enhanced optical properties of rare earth (RE) doped inorganic glasses mediated via surface plasmon resonance (SPR) by embedding metallic nanoparticles (NPs) with controlled sizes is ever-demanding in photonics. Erbium (Er3+) doped zinc–sodium tellurite glasses containing gold NPs are prepared and spectroscopic characterization are made. The heat treatment temperature dependent variations in refractive index, density, molar volume, molar refraction and polarizability are ascribed to the alteration in bonding of non-bridging oxygen (NBO) ions originates from annealing processes between 325 and 400°C. X-ray diffraction pattern confirms the amorphous nature of the glass samples. TEM micrograph reveals the nucleation of heat treated Au0 NPs and SAED manifest their growth along the (111) crystallographic planes having average diameter in the range 7.4–10.3nm. The UV–vis spectra exhibit seven absorption bands corresponding to 4f–4f transitions of Er3+ ions. The SPR bands evidenced in the range 629–631nm validate the growth of gold NPs in the glass matrix. The glass annealed at 350°C displays maximum enhancement in the up-conversion (UC) emission intensity by a factor of 4.86 and 3.40 for green bands (2H11/2→4I15/2 and 4S3/2→4I15/2) and a strong enhancement by a factor of 4.91 for red band (4F9/2→4I15/2). The enhancement is primarily attributed to the local field effect of non-spherical NPs assisted SPR effects and the energy transfer processes between Er3+ ions and NPs. The excellent luminescence efficiency of proposed glasses nominates them potential for photonic devices and solid state lasers.