AbstractTb3Al5O12 (TAG) ceramics with high optical quality were fabricated successfully by a solid‐state reaction method combined with hot isostatic pressing (HIP) post‐treatment. The microstructure, optical transmittance, Verdet constant, and thermo‐optical properties were investigated. The obtained TAG ceramics showed a dense microstructure, and the in‐line transmittance reached 82.8% at 1070 nm after laser‐grade polishing. The Verdet constant of TAG ceramics was measured to be 50.9 rad·T1·m−1 at 1070 nm, which is higher than that of commercial Tb3Ga5O12 crystals. The Faraday isolator based on TAG ceramics can provide an isolation ratio of 30 dB with a laser power of more than 1 kW. With excellent optical quality, high Verdet constant, and maximum working power, TAG transparent ceramics are promising for applications of kilowatt‐level Faraday isolators.