A novel layered transparent Er:CaF2 composite ceramic was proposed in the present study. Er:CaF2 nanoparticles were synthesized by a chemical coprecipitation method. The crystal structures and morphologies of synthesized nanoparticles were performed by X-ray diffraction (XRD) and field emission scanning electron microscope (FE-SEM) measurements, respectively. Transparent composite ceramic was fabricated by the combination of multistep dry pressing and hot-pressed sintering method without any sintering aids or binders. The average grain size of 2% Er-doped and 5% Er-doped layers were about 30 and 55 mu m, respectively. The thickness of interfacial between two different Er-doped layers was 150-200 mu m. For a 1.5 mm thickness transparent Er:CaF2 composite ceramic, the optical transmittance reached 44.9% at 500 nm and 53.6% at 1200 nm. The luminescence spectra and thermal conductivities of transparent ceramic specimens were also discussed.