Transparent cobalt-doped magnesium aluminate spinel (Co:MgAl2O4) ceramics with a submicrometer grain size were prepared by spark plasma sintering. For the first time, the nonlinear absorption of Co:MgAl2O4 transparent ceramics was experimentally demonstrated. Both ground state absorption (sigma GSA) and excited state absorption (sigma ESA) were estimated using the solid-state slow saturable absorber model based on absorption saturation measurements performed at 1.535m. sigma GSA and sigma ESA for 0.03 at.% Co:MgAl2O4 were found to be 4.1x10-19cm2 and 4.0x10-20cm2, respectively. In the case of 0.06 at.% Co:MgAl2O4 ceramics, sigma GSA = 2.6x10-19cm2 and sigma ESA= 5.3x10-20cm2 were determined.