We report a direct confirmation of the generally proposed rare-earth excitation model in GaN. The intermediate step involving the formation of excitons bound to rare-earth ions prior to the rare-earth excitation is demonstrated. Using a two-color experiment, we show that the erbium photoluminescence decay following a pulsed laser excitation is quenched when an additional continuous-wave (cw) laser is applied. As the two beams excite the sample, the cw beam perturbs the intermediate step of the Er excitation mechanism either by photoionization of Er-related trapped carriers or by inducing an Auger effect between the trapped carriers and free carriers.