A transparent Tm:Lu3Al5O12 ceramic is fabricated by solid-state reactive sintering at 1830 °C for 30 h using commercial α-Al2O3 and Lu2O3/Tm2O3 powders and sintering aids - MgO and TEOS. The ceramic belongs to the cubic system and exhibits a close-packed structure (mean grain size: 21 µm). The in-line transmission at ∼1 µm is 82.6%, close to the theoretical limit. The spectroscopic properties of the ceramic are studied in detail. The maximum stimulated-emission cross-section is 2.37×10-21 cm2 at 1749nm and the radiative lifetime of the 3F4 state is about 10 ms. The modified Judd-Ofelt theory accounting for configuration interaction is applied to determine the transition probabilities of Tm3+, yielding the intensity parameters Ω2 = 2.507, Ω4 = 1.236, Ω6 = 1.340 [10-20 cm2] and α = 0.196×10-4 cm. The effect of excited configurations on lower-lying interconnected states with the same J quantum number is discussed. First laser operation is achieved under diode-pumping at 792 nm. A 4 at.% Tm:Lu3Al5O12 ceramic laser generated 3.12 W at 2022-2035nm with a slope efficiency of 60.2%. The ceramic is promising for multi-watt lasers at >2 µm.