By using combinations of appropriate laser crystals, we simulated a Yb:YAG/Cr<sup>4+</sup>:YAG composite crystal with a Cr,Yb:YAG interface layer. The effect of the Cr,Yb:YAG interface layer on the laser performance of the Yb:YAG/Cr<sup>4+</sup>:YAG composite crystal has been investigated for the first time to our best knowledge. The formation of the Cr,Yb:YAG interface layer in the Yb:YAG/Cr<sup>4+</sup>:YAG composite crystal has a negative impact on average output power, optical efficiency, as well as single pulse energy and peak power. In addition, the Cr,Yb:YAG interface layer also leads to strong mode competition, resulting in the decrease of the longitudinal mode number, the widening of longitudinal mode separations, and the poor stability of laser pulse trains. The results of this study are of theoretical and practical importance to develop novel Yb:YAG/Cr<sup>4+</sup>:YAG composite crystals that could be used to obtain laser pulses with high peak power and high optical efficiency.