This paper reports optical studies on transparent electro-optic ceramics, 2%Er:PLZT and 0.5%Er-2.5%Yb:PLZT. Strong photoluminescence was observed in these polycrystalline ceramics in the 1550 nm region when pumped by diode lasers either at ∼970nm or ∼800nm. Efficient green upconversion luminescence was also observed. Co-doping Yb3+ did enhance the Er3+ emission in the 1550nm region when pumped with ∼970 nm diode laser. This work provides important information for developing microchip and high-power ceramic lasers using Er-doped PLZT ceramics.