Y2.85Er0.15Al5O3 was prepared by combustion process. Phase evolution of the synthesized powders was determined by XRD. Single-phase cubic YAG: Er3+ crystalline powders were obtained by calcining the combusted product at 1000°C and no intermidiate phase was observed. SEM morphology showed that the resultant YAG: Er3+ powders were porous. Upconversion emission spectra were measured on the powder compact pumped by a 980nm continuous wave diode laser. The relationship between pump power and luminescence intensity suggested that a two-photon process is active in this sample. The upconversion machanism of YAG: Er3+ system was also discussed.