Semi‐insulating polycrystalline silicon films with oxygen concentrations in the range 4–27 at. % were deposited by low‐pressure chemical vapor deposition of SiH4 and N2O onto silicon substrates, annealed at 920 °C, and then implanted with 2×1015 500 keV Er ions/cm2. After annealing at temperatures in the range 300–900 °C, the samples show intense room‐temperature luminescence around 1.54 μm, characteristic of intra‐4f emission from Er3+, upon excitation using an Ar ion laser. The luminescence intensity increases with increasing oxygen concentration in the film. The luminescence is attributed to Er3+ ions in oxygen‐rich shells around Si nanograins, excited by a photocarrier‐mediated process.