A Nd(3+)-doped tellurite-glass terrace microsphere was fabricated, and its laser characteristics using free-space pumping were investigated. A localized laser heating technique was used for preparing the 29-µm-diameter microsphere. The uncoated sphere exhibited many laser lines with 1.3-mW threshold. Fewer laser lines were observed after terrace formation. The terrace microsphere's lasing threshold was 0.6-2.4 mW depending on the pumping position in the terrace. These results indicate that the terrace structure can modify the modes of a microsphere laser and decrease the laser threshold due to an increase in the coupling efficiency between the cavity and free-space beam.