The deficiency of Y3Al5O12:Ce (YAG:Ce) luminescence in red component can be compensated by doping Gd3+, thus lead to it being widely used for packaging warm white light-emitting diode devices. This article presents a systematic study on the photoluminescence properties, crystal structures and electronic band structures of (Y1−xGdx)3Al5O12: Ce3+ using powerful experimental techniques of thermally stimulated luminescence, X-ray diffraction, X-ray absorption near edge structure (XANES), extended X-ray absorption fine structure (EXAFS) and ultraviolet photoelectron spectra (UPS) of the valence band, assisted with theoretical calculations on the band structure, density of states (DOS), and charge deformation density (CDD). A new interpretation from the viewpoint of compression deformation of electron cloud in a rigid structure by combining orbital hybridization with solid-state energy band theory together is put forward to illustrate the intrinsic mechanisms that cause the emission spectral shift, thermal quenching, and luminescence intensity decrease of YAG: Ce upon substitution of Y3+ by Gd3+, which are out of the explanation of the classic configuration coordinate model. The results indicate that in a rigid structure, the charge deformation provides an efficient way to tune chromaticity, but the band gaps and crystal defects must be controlled by comprehensively accounting for luminescence thermal stability and efficiency.