In this work, MgAl2O4: Cr3+ transparent ceramics have been synthesized by the hot press sintering techniques, and the effect of the sintering aid Gd2O3 and its content on the densification, microstructure, and optical, photoluminescence was studied and discussed. The relative density reached 99.29% with 0.8 wt% Gd2O3 as a sintering aid, and the optical transmittance at 686 nm and 1446 nm were approximately 76%. As Gd2O3 content continued to increase, the grain size of the ceramics became smaller and uniform, accompanied by some pores with the size of similar to 1 mu m. The ceramics with 4.0 wt% Gd2O3 showed a higher transmittance, of 82% at 1446 nm. Additionally, Gd2O3 was helpful for Cr3+ in the sites of octahedral symmetry, which increased the quantum yield. The quantum yield of MgAl2O4: Cr3+ with 0.8 wt% Gd2O3 was about 0.175, which was 36% higher than that of ceramic without Gd2O3. In short, the sintering aid Gd2O3 not only contributed to improving the densification, homogenizing the grain size, and heightening the optical transmittance but also enhanced the quantum yield of Cr3+.