Highly transparent (Y0.95-xGdxEu0.05)(2)O-3 (x=0.15-0.55) ceramics have been fabricated by vacuum sintering at the relatively low temperature of 1700 degrees C for 4h with the in-line transmittances of 73.6%-79.5% at the Eu3+ emission wavelength of 613nm (similar to 91.9%-99.3% of the theoretical transmittance of Y1.34Gd0.6Eu0.06O3 single crystal), whereas the x=0.65 ceramic undergoes a phase transformation at 1650 degrees C and has a transparency of 53.4% at the lower sintering temperature of 1625 degrees C. The effects of Gd3+ substitution for Y3+ on the particle characteristics, sintering kinetics, and optical performances of the materials were systematically studied. The results show that (1) calcining the layered rare-earth hydroxide precursors of the ternary Y-Gd-Eu system yielded rounded oxide particles with greatly reduced hard agglomeration and the particle/crystallite size slightly decreases along with increasing Gd3+ incorporation; (2) in the temperature range 1100 degrees C-1480 degrees C, the sintering kinetics of (Y0.95-xGdxEu0.05)(2)O-3 is mainly controlled by grain-boundary diffusion with similar activation energies of similar to 230kJ/mol; (3) Gd3+ addition promotes grain growth and densification in the temperature range 1100 degrees C-1400 degrees C; (4) the bandgap energies of the (Y0.95-xGdxEu0.05)(2)O-3 ceramics generally decrease with increasing x; however, they are much lower than those of the oxide powders; (5) both the oxide powders and the transparent ceramics exhibit the typical red emission of Eu3+ at similar to 613nm (the (D0F2)-D-5-F-7 transition) under charge transfer (CT) excitation. Gd3+ incorporation enhances the photoluminescence and shortens the fluorescence lifetime of Eu3+.