Er 3+ :Y 2 O 3 transparent ceramics have been fabricated successfully via nanocrystalline powder technology and hydrogen atmosphere sintering method. Under the excitation of 980nm diode laser, very strong green emission centered at 562nm and red emission centered at 660nm were observed, which were assigned to the transitions of 4 S 3/2 / 2 H 11/2 → 4 I 15/2 and 4 F 9/2 → 4 I 15/2 energy levels of Er 3+ ions, respectively. The excited state absorption mechanism played an important role in the upconversion processes and cooperative energy transfer (CET) processes between two nearby Er 3+ ions cannot be ignored. By changing the doping concentration of Er 3+ ions, the color of upconversion emissions can be tuned from green to red, gradually.