Y 2O 3 transparent ceramics with different Nd concentration (0.1–7.0at%) were fabricated using ZrO 2 as additive. All the samples exhibit high transparency over a broad spectral region. The elements (Y, O and Nd) are uniformly distributed in the ceramic body, and the average grain size increases with Nd content. Based on the absorption spectrum, the Judd–Ofelt intensity parameters are calculated ( Ω 2=4.364×10 −20 cm 2, Ω 4=3.609×10 −20 cm 2 and Ω 6=2.919×10 −20 cm 2). The absorption coefficients increase linearly with Nd 3+ doping concentration. The absorption cross-section at 804 nm and stimulated emission cross-section at 1078 nm are calculated to be 1.54×10 −20 and 7.24×10 −20 cm 2, respectively. All the emission bands exhibit the highest emission intensities with 1.0at% Nd 3+ ion content, while the lifetime decreases dramatically from 321.5 μs (0.1at% Nd) to 17.9 μs (7.0at% Nd). According to the emission spectra and measured lifetime, the optimum doping concentration of Nd 3+ ion in Y 2O 3 transparent ceramic might be around 1.0at%.