Abstract Light manipulation has promoted applications in all‐optical processing. 2D anisotropic rare earth (RE) materials are promising for light modulation to realize information transmission and encryption due to the unique optical behaviors of RE ions. Here, image transmission and encryption have been realized by using 2D anisotropic RE material Eu 2 O 3 . The polarized photoluminescence (PL) of Eu 2 O 3 has been innovatively applied for information transmission by switching the on/off states. The opposite two modes of polarization‐dependent PL have been applied to grayscale‐resolved image transmission and encryption with high security. This novel approach, polarization manipulation on the PL of 2D anisotropic RE materials, will shed light on the development of information processing, all‐optical switch, and all‐optical computation.