We report the first demonstration of Cr4+ centers generation in YAG:Cr,Mg crystals using CO2 laser radiation. After crystal growth only a small part of chromium ions is introduced into a crystal structure as Cr4+ ions in tetrahedral positions, the other ones are at different positions or at mixed valency Cr3+ and Cr4+. Chromium ions of Cr4+ valency can occur in the desired points of YAG structure as a result of complex reaction sin solid-state phase. Such reactions proceed during multi-stage crystal annealing. The paper presents the result of investigations of YAG:Cr,Mg crystals after CO2 laser annealing in oxidizing atmosphere at a temperature of 600 divided by 900 degrees C. Investigations of YAG:Cr4+ spectroscopic properties and measurements of absorption and luminescence bands, allow estimation of chromium ion concentration at particular charging state and positions in YAG crystalline structure, and allow also to determine their mutual relations and influence on non-linear properties of absorber. Basing on ESA and two-level absorber model, the absorption cross section, concentration of active centers, relaxation time, saturation energy, and non-active losses have been estimated.