Ultra-highly transparent ZrO2-doped Yb3+: Y2O3 ceramics were prepared by slip casting and vacuum pressureless sintering and the transmittance reached the highest value of 80.9% for the sample doped with 8.0at% Yb3+. There are three main absorption peaks at 905, 950, and 976nm, corresponding to the transition from the lowest level of field splitting of F-2(7/2) crystal to every splitting energy levels of F-2(5/2) crystal field. We analyzed the absorption and emission spectra of transparent Yb3+: Y2O3 from the energy level structure of Yb3+, and the transmission, absorption, and emission spectra were systematically studied. There are three main absorption peaks at 905, 950, and 976nm and four emission peaks at 1076, 1031, 1013, and 977nm, respectively. The emission peaks at 977 and 1013nm broaden and vanish for 8.0 and 10.0at% Yb3+-doped Y2O3, which may be related to the change of Y2O3 crystal field caused by high concentration.