Fifteen layers’ composite YAG/Yb:YAG/YAG laser ceramic with grain size of about 5 μm was fabricated through tape casting process together with vacuum sintering technology, and its microstructure, optical properties, and laser performance were investigated. The experimental results showed that annealing in oxygen atmosphere could remove the lattice distortion and improve the optical transmittance. The in-line transmittance was 83% at 800 nm. The laser study indicated that the threshold pump power was 5.5 W with output coupler transmission of 6% and slope efficiency achieved 12%. The maximum output power of 0.53 W was achieved at the absorbed pump power of 10 W.