A series of yttria-stabilized zirconia single-crystals doped with 0.000–0.250 mol% Tb4O7 was prepared by the optical floating-zone method. As shown by XRD and Raman spectroscopy, all of the crystals had a cubic-phase structure. These were initially orange–yellow in color, which is indicative of the presence of Tb4+ ions, but they then became colorless after being annealed in a H2/Ar atmosphere as a result of the reduction of Tb4+ to Tb3+. The absorption spectra of the unannealed samples show both the 4f 8→4f 75d1 transition of Tb3+ ions and the Tb4+ charge-transfer band. In addition, the transmittance of the crystals was increased by annealing. Under irradiation with 300 nm of light, all of the single-crystal samples showed seven emission peaks in the visible region, corresponding to the decay from the 5D3,4 excited state of Tb3+ to the 7FJ (J = 6–0) states. The most intense emission was at 544 nm, which corresponds to the typical strong green emission from the 5D4→7F5 transition in Tb3+ ions.