Alumina (Al2O3) is one of the most versatile ceramics, utilized in an amazing range of structural and optical applications. In fact, chromium-doped single crystal Al2O3 was the basis for the first laser. Today, most photoluminescent (PL) materials rely on rare earth (RE) rather than transition-metal dopants because RE doping produces greater efficiencies and lower lasing thresholds. RE-doped alumina could provide an extremely versatile PL ceramic, opening the door for a host of new applications and devices. However, producing a transparent RE:Al2O3 suitable for PL applications is a major challenge due to the very low equilibrium solubility of RE (∼10−3%) in Al2O3 in addition to alumina's optical anisotropy. A method is presented here to successfully incorporate Tb3+ ions up to a concentration of 0.5 at% into a dense alumina matrix, achieving a transparent light-emitting ceramic. Sub-micrometer alumina and nanometric RE oxide powders are simultaneously densified and reacted using current-activated, pressure-assisted densification (CAPAD), often called spark plasma sintering (SPS). These doped ceramics have a high transmission (∼75% at 800 nm) and display PL peaks centered at 485 nm and 543 nm, characteristic of Tb3+ emission. Additionally, the luminescent lifetimes are long and compare favorably with lifetimes of other laser ceramics. The high transparencies and PL properties of these ceramics have exciting prospects for high energy laser technology.