An X-cut LiNbO3 substrate has been doped with Yb3+ ions by thermal diffusion from an Yb metal film of thickness 7nm. Polarised absorption and fluorescence spectra of the dopant ion have been measured using Ti-diffused y-propagating channel waveguides prepared in the doped region. Yb is a diode pumpable laser ion with characteristics that can be compared favourably with those of Nd in some respects; for example the small energy difference between pump and laser photons reduces thermal load facilitating high power operation. A waveguide laser geometry is particularly advantageous for Yb due to the quasi-3-level nature of the laser transition. The simple fabrication technique described here has been used to produce a system which may have the potential to operate as an Yb waveguide laser in an electro-optic host crystal.