We report on the crystal growth, optical spectroscopy, and room-temperature continuous-wave laser generation around 2 μm with co-doped (Ho,Tm):KLu(WO4)2 monoclinic crystals. Co-doped crystals at different doping levels were grown by the top-seeded solution growth slow-cooling method. We characterized the spectroscopy of Ho and Tm ions in KLuW in terms of polarized optical absorption, photoluminescence, and lifetime measurements. Continuous-wave laser operation at room-temperature at a wavelength of 2.06 μm was achieved with several crystals at different co-doping levels, establishing that the optimum doping ratio is 5.29×1019 at./cm3 for Ho and 3.10×1020 at./cm3 for Tm (0.5 at. %Ho, 5.0 at. %Tm:KLuW), reaching a maximum output power of 145 mW and a slope efficiency of 12.9%.