A diode-pumped femtosecond ytterbium laser with a host material of Y2O3 ceramics is reported. Passive mode locking by a semiconductor saturable-absorber mirror generates 98-MHz, 615-fs pulses at a center wavelength of 1076.5 nm. The average power is 420 mW and the pulse energy is 4.3 nJ with a 2.6-W absorbed pump power. To our knowledge, this is the first continuous-wave mode-locked ceramic laser.