Highly transparent polycrystalline Yb0.118Lu0.464Y1.418O3 solid solution is fabricated at 1780 °C by solid‐state vacuum sintering of mixed sesquioxide nanoparticles synthesized in a laser plume. A comparative study of the structural and spectroscopic properties of pure sesquioxides and mixed composition is carried out. The lattice constant and grain size of the mixed composition are found to be intermediate between those of Yb:Y2O3 and Yb:Lu2O3, indicating the formation of a substitutional solid solution. Partial substitution of Y3+ for Lu3+ cations with a smaller ionic radius has weak adverse effect on the content of pores and the optical transmittance of ceramics, but causes compressive lattice strain, resulting in a blue shift of absorption bands. The width of the emission band centered at 1077 nm for the disordered structure is estimated to be 21 nm (full width at half maximum), which is 3–4 nm broader than that of single compositions.