Theoretical description of the charge-transfer state arising in Y 2 O 3 –Yb crystal after excitation is proposed on the basis of ab initio embedded cluster calculations. The best agreement with experimental data was obtained for a hole localized on a 2p orbitals of one of the oxygen ions surrounding the Yb 3+ ion. Parameters of the charge-transfer luminescence such as Stokes shift, maxima of the absorption and emission bands and radiative lifetime obtained from the ab initio calculations are in fair agreement with the experimental data.