We report on the spectroscopic characteristics and upconversion emission in Er3+ doped Yttria (Y2O3) transparent ceramics prepared by a modified two-step sintering method. The near-infrared (1.5 μm) emission properties were evaluated as a function of Er3+ concentration. Judd-Ofelt intensity parameters, radiative rates, branching ratios, and emission lifetimes were calculated and compared with results reported for Er3+ doped Y2O3 single crystal and nanocrystals. Following pumping at 1.532 μm, weak blue (~0.41 μm, 2H9/2→4I15/2), strong green (~0.56 μm, 2H11/2, 4S3/2→4I15/2) and red (~0.67 μm, 4F9/2→4I15/2) emission bands were observed as well as weak near-infrared emissions at 0.8 μm (4I9/2→4I15/2) and 0.85 μm (4S3/2→4I13/2) at room temperature. The upconversion emission properties under ~1.5 μm pumping were further investigated through pump power dependence and decay time studies. Sequential two-photon absorption leads to the 4I9/2 upconversion emission while energy transfer upconversion is responsible for the emission from the higher excited states 2H9/2, 2H11/2, 4S3/2, and 4F9/2. The enhanced red emission with increasing Er3+ concentration most likely occurred via the cross-relaxation process between (4F7/2 → 4F9/2) and (4I11/2 → 4F9/2) transitions, which increased the population of the 4F9/2 level.