Transparent Nd:YAG ceramic microchips were fabricated through the slip casting shaping directly from the slurry formed by the commercial Al₂O₃/Y₂O₃/Nd₂O₃ powders, and followed by the vacuum sintering procedure. Viscosity of the slurries, the phase evolution and the densification behavior were investigated. For the Al₂O₃/Y₂O₃/Nd₂O₃ compound slurries system, the optimal condition is 0.5wt.% NH₄PAA dispersant and 30wt.% solid loading at pH≥8. The YAG phase started to form at 1250°C and pure YAG phase could be obtained at 1400°C. The optical in-line transmittance of the Nd:YAG ceramics with thickness of 2mm was about 83.8% at 1064nm and 82.5% at 400nm, which hit the upper limit of the theoretically calculated value. For the 1.0at.% Nd:YAG ceramic microchip, the slope efficiency was 43% for 1.0at.% Nd:YAG ceramic pumped by 920mW cw Ti:sapphire tunable laser, and the maximum laser output power 246W was obtained for 2.0at.% Nd:YAG ceramics pumped by 925W LD.