Increasing the emission cross section of rare earth (RE) ions-doped transparent oxide glasses is a challenging issue. The incorporation of the metal nanoparticles (NPs) has been proposed as a promising approach to improve the emission properties, though the mechanism behind such a phenomenon is a controversial topic. Tellurite glass doped with ions and silver NPs is prepared and the optical absorption and emission properties are studied. The surface plasmon band of the silver NPs is observed at around 522 nm. Absorption and excitation bands of the ions are detected in the visible spectral region and associated to the transitions from ground state to various excited states. Threefold enhancement in the luminescence of ions is observed under 800-nm laser excitation by incorporation of up to 1 mol. %. Probable energy transfer and local field enhancements are discussed to explain the possible interactions between metal and RE ions.