Rare-earth Nd 3+ -doped yttrium oxide (Y 2 O 3 ) is an important near-infrared (NIR) laser material with good chemical and thermal stability. However, the microstructure and energy transition mechanism of Nd 3+ -doped Y 2 O 3 remains challenging. Herein, we report a systematic study on the microstructure and energy transition of Nd 3+doped Y 2 O 3 by unbiased CALYPSO structural search and our newly developed WEPMD method. A new monoclinic structure with P2 space group symmetry is identified. It is shown that the doped Nd 3+ ion exactly substitutes the Y 3+ ion in the host crystal, resulting in the decrease of the energy band gap of Y 2 O 3 . Based on the Judd−Ofelt theory, a large number of energy transitions are predicted at the NIR region. The results indicate that the energy transition of 2 H (2)11/2 → 4 I 15/2 is about 1033 nm, which makes it a good candidate for laser action. Three important absorption lines from 4 I 9/2 to 2 H (2)11/2 , 4 G 5/2 , and 2 G (1)7/2 , at approximately 600 nm and indistinguishable by experiment, are uncovered for the first time. The present findings enrich the fundamental understanding of the Nd:Y 2 O 3 crystal and will help advance the rational design of a new type of laser device.