Conventional ceramic processing techniques do not produce ultrafine-grained materials. However, since the mechanical and optical properties are highly dependent on the grain size, advanced processing techniques are needed to obtain ceramics with a grain size smaller than the wavelength of visible light for new laser sources. As an empirical study for lasing from an ultrafine-grained ceramics, transparent Yb3+:Y2O3 ceramics with several doping concentrations were fabricated by spark plasma sintering (SPS) and their microstructures were analyzed, along with optical and spectroscopic properties. Laser oscillation was verified for 10at.% Yb3+:Y2O3 ceramics. The laser ceramics in our study were sintered without sintering additives, and the SPS produced an ultrafine microstructure with an average grain size of 261nm, which is about one order of magnitude smaller than that of ceramics sintered by conventional techniques. A load was applied during heating to enhance densification, and an in-line transmittance near the theoretical value was obtained. An analysis of the crystal structure confirmed that the Yb3+:Y2O3 ceramics were in a solid solution. To the best of our knowledge, this study is the first report verifying the lasing properties of not only ultrafine-grained but also Yb-doped ceramics obtained by SPS.