In the current work, a series of Lu1.5Y1.5Al5O12 (LuYAG) phosphors doped with different Dy3+ ion concentrations (0.5, 1, 2, 3, 4, and 5 at% in nominal) have been synthesized by high-temperature solid-phase approach and characterized by X-ray diffraction, scanning electron microscopy and energy dispersive X-ray spectroscopy, transmission electron microscopy, optical absorption, emission, and decay lifetimes. The shape and position of Dy3+ ion absorption peaks were consistent in all samples, and the absorption peak intensity increased with enhancing Dy3+ concentration. Under λexci. = 448 nm, 4F9/2 → 6H15/2, 13/2, 11/2, 9/2 emission transitions have been identified in which the 4F9/2 → 6H13/2 transition possesses the highest intensity. Luminescence decay times were evaluated for Dy3+: 4F9/2 level. Relying on the absorption and luminescence spectra, along with fluorescence decay patterns, the optimal doping concentration of 1 at% was identified. The energy transfer process between Dy–Dy ions was discussed and utilized to explain the concentration quenching phenomenon. Notably, 1 at% Dy: LuYAG could be used as a potential candidate for commercial yellow phosphors.