The invention discloses Nd-sensitized yttrium oxide-based laser ceramic. Each crystal particle of the laser ceramic is provided with a core-shell structure, a core layer is a (Y,Nd,M)2O3 phase, a shell layer is a (Y,N)2O3 phase, wherein M is rare earth luminescent ions, and N is a sintering aid. A preparation process comprises the following steps: firstly mixing a yttrium compound, a neodymium compound and an M compound, calcining to obtain (Y,Nd,M)2O3 powder, then mixing the yttrium compound with the N compound, calcining to obtain (Y, N)2O3 powder, and then mixing the two powders; or mixing the yttrium compound with the N compound, then directly adding the (Y,Nd,M)2O3 powder, mixing and calcining; carrying out isostatic pressing on the obtained mixed powder, carrying out vacuum sintering, cooling, and then annealing. The laser ceramic disclosed by the invention has the advantages that a (Y,N)2O3 thin layer with excellent sintering property is utilized for coating the (Y,Nd,M)2O3 phase, and the lattice distortion is reduced on the basis of improving the sintering property of the ceramic, so that excellent laser performance is obtained.