We report a linearly-polarized 1617 nm Er:YAG laser pumped by 1532 nm fiber-coupled laser diodes. An L-shaped resonator was employed incorporating two Er:YAG crystals which were pumped independently. In continuous-wave operation, a maximum output power of 7.73 W was obtained with an optical conversion efficiency of ~15.2% (versus incident pump power). To the best of our knowledge, this was the highest conversion efficiency ever demonstrated for a directly diode-pumped Er:YAG laser. In Q-switched operation, pulses with energy of 7.8 mJ and pulse duration of 80 ns were yielded at a repetition rate of 500 Hz, and the corresponding peak power was ~ 97 kW at 1617 nm.