Optical absorption, emission spectra have been measured for polycrystalline Nd-doped Y3Al5O12 ceramics. Fluorescence lifetimes of 257.6 μs, 237.6 μs, 184.2 μs and 95.6 μs have been obtained for 0.6%, 1%, 2% and 4% neodymium-doped YAG ceramics, respectively. For the first time, highly efficient laser oscillation at 1064 nm has been obtained with this kind of ceramics. Slope efficiency of 53% has been achieved on a uncoated 4.8-mm thick 1% Nd:YAG ceramics sample. Optical to optical conversion efficiency is 47.6%. Laser oscillation has also been obtained with a 2% Nd:YAG ceramics. The optical properties and laser output results have been compared with that of Nd:YAG single crystal grown by the Czochralski method. Almost identical results have been achieved including laser experiments results. But fabrication of Nd:YAG ceramics is much easier compared to the single-crystal growth method. And also large size (now of about 400 mm diameter×5 mm is available) and high-concentration (>1%) Nd:YAG ceramics can be fabricated. The results show that this kind of Nd:YAG ceramics is a very good alternative to Nd:YAG single crystal.