A new solid-state laser material——Yb：Y2O3 transparent ceramic based on nano crystalline technology and the vacuum sintering (NTVS) method is reported. The manufacture technology, the physical and chemical properties, the energy level split structure and the spectra characteristics of Yb：Y2O3 ceramic media are discussed and compared with those of Yb:YAG single crystal. Further more, with the compact active mirror laser (CAMIL) design, the laser parameters of Yb:Y2O3 ceramic are demonstrated at room temperature. An optimum output power of 10.5W has been obtained under the max imum pumping power of 35 W. Its corresponding slope efficiency was 37.5%. The laser wavelength red-shift was observed with the increasing of the pump power and the reflectivities while the decrease of the radium of output coupler (ROC). In fact, Yb：Y2O3 ceramic is an ideal laser material, it has excellent physical and chemical properties and spectra characteristics comparable with those of the Yb:YAG single crystal. Further more, its thermal conductivity and emission bandwidths are nearly twice those of Yb:YAG, which shows that it is a promising candidate in high power and femto-second pulsed laser applications.