Yttrium aluminum garnet (YAG) crystals are an important gain medium in thin-sheet solid-state lasers, and their processing quality directly affects the performance of solid-state lasers. But it is difficult to achieve high efficiency and high quality of YAG crystals by traditional chemical mechanical polishing (CMP). In this study, we developed a new polishing slurry for photoassisted chemical mechanical polishing (PCMP) of YAG crystals. The polishing slurry is composed of peroxymonosulfate (PMS), manganese ferrite (MnFe2O4), alumina (Al2O3) abrasives, and deionized water. PCMP is conducted in an ultraviolet (UV) light environment. When employing this polishing slurry for PCMP processing of YAG crystals, the material removal rate (MRR) achieved 250 nm/min and the surface roughness achieved 0.35 nm Sa. The experiments verified that both UV light and MnFe2O4 can effectively activate PMS to produce active free radicals and further enhance the chemical action of the polishing slurry. X-ray photoelectron spectroscopy (XPS) analysis results indicated that active radicals reacted with the surface structure of the crystal and removed the aluminum-oxygen octahedron in large quantities from it. The structural defects reduced the surface hardness of the crystal, which means that active free radicals can modify the crystal surface materials.