We report the first demonstration of polycrystalline Nd:YAG (Y3Al5O12), and Nd-doped YAG single crystal with almost perfect pore-free structure by advanced ceramic processing. The laser conversion efficiency of pore-free polycrystalline Nd and Yb doped ceramics is extremely high, and their optical qualities are comparable to that of commercial high quality Nd:YAG single crystal. We have succeeded also in the fabrication of Nd:YAG single crystal, which can be used for laser oscillation, by solid-state reaction method. Laser oscillation efficiency was very low when pores were remained inside single crystal, however the laser oscillation efficiency of pore-free Nd:YAG single crystal was slightly higher than that of polycrystalline Nd:YAG ceramics having high optical quality. From this fact, it was recognized that the optical scattering occurs mainly at the residual pores inside the Nd:YAG ceramics, and the scattering at the grain boundary is very little. In addition, we confirmed that Nd heavily-doped YAG single crystal can be fabricated by sintering method. We have demonstrated the fabrication of composite ceramic with complicated structures without the needs of precise polishing and diffusion bonding. Advanced ceramic processing, which enables design flexibility of laser element, presented in this work is important in the development of high performance laser (high efficiency, high beam quality and high output energy etc.) Moreover, we have recently developed polycrystalline ceramic fiber laser first in the world, and achieved over 8W output per unit length of the fiber.