The local environments within an amphiphilic polymer shell wrapped around lanthanide-doped upconverting nanoparticles were probed using steady-state and time-resolved fluorescence spectroscopy techniques. Emission lifetime measurements of pyrene chromophores trapped within the polymer shell reveal that there are at least two environments, where the organic pyrene molecules are encapsulated in hydrophobic environments that have lower polarity than in water. The migration of pyrene chromophores from their initial location to another location was also observed, demonstrating that the polymeric shell provides both hydrophobicity and mobility for entrapped molecules. These results offer insight into what outcomes can be expected when chemical reactions are carried out in these nanoassemblies, especially if they are to be used as nanoreactors for synthesis or delivery vehicles for therapeutics.