A transparent and conducting ZnO:Er:Yb thin film with upconversion properties has been achieved after being annealed with continuous laser radiation just before the ablation point of the material. This work demonstrates that the laser energy preserves the conductivity of the film and at the same time creates an adequate surrounding for Er and Yb to produce visible upconversion at 660, 560, 520, and 480 nm under 980 nm laser excitation. The relation between the structural, electrical and upconversion properties is discussed. It is observed that the laser energy melts part of the material, which recrystallizes creating rare earth oxides and two different wurtzite structures, one with substitutional rare earths and oxygen vacancies (responsible for the conductivity) and the other without substitutional rare earth ions (responsible for the upconversion emission).