Transparent 1 at% Nd3+:8Y-ZrO2 ceramics were fabricated using the solid-state sintering method. Using Judd-Ofelt analysis, the J–O intensity parameters were calculated based on the absorption spectrum, and Ω2, Ω4 and Ω6 were calculated to be 0.46 × 10−20 cm2, 0.29 × 10−20 cm2, and 0.22 × 10−20 cm2, respectively. The radiation transition probability, fluorescence branch ratio, and radiation lifetime were determined using the parameters. The branching ratios for the 4F3/2→4I9/2 and 4F3/2→4I11/2 transitions were 47.69% and 43.87%, respectively. The fluorescence lifetime of the 4F3/2 level was approximately 442 μs, and the quantum efficiency was 19%. Combined with its high temperature resistance and good mechanical strength, Nd3+:8Y-ZrO2 transparent ceramics can have potential applications in solid state heat capacity laser.