High-optical-quality ternary [(Y1-xGdx)(0.99)Dy-0.01](2)O-3 (x = 0 and 0.4) ceramics were successfully fabricated by vacuum sintering with in-line transmittances of 71.4%-75.1% at 574 nm, the wavelength of Dy3+ emission (the F-4(9/2) -> H-6(13/2) transition). Substitution of Gd3+ for Y3+ significantly affected the photoluminescent and scintillant properties of the ceramics. Gd3+ addition effectively increased lattice parameters and theoretical densities of the ceramic samples; this contributed to enhanced X-ray absorption coefficients. Both [(Y1-xGdx)(0.99)Dy-0.01](2)O-3 (x = 0 and 0.4) ceramics displayed typical Dy3+ emissions from F-4(9/2) -> H-6(J) (J = 15/2, 13/2, 11/2) transitions under UV and X-ray irradiations. By incorporating Gd3+ into the lattice, a stronger excitation peak of Gd3+ due to internal f-f transitions relative to Dy3+ was observed at 276 nm; subsequent ceramics obtained a sharper PL intensity and a warmer hue via effective energy transfer from Gd3+ to Dy3+. Using a Gd3+ dopant generally reduces the total photoluminescence/photoluminescence excitation intensities and light output; it also delays the lifetime and afterglow of the transparent ceramics.