We report on a high-peak-power electro-optically Q-switched laser emitting a near-diffraction-limited beam profile at 1064 nm by using a gradient-doped Nd:YAG crystal. The gradient-doped crystal features a unique combination of a reduced thermal lens effect through effectively spreading the heat load distribution within its volume. Its performance is compared with those of Nd:YAG crystals with uniform volume doping distribution operating in the Q-switched regime with the same laser configuration, demonstrating the higher average and peak power achievable with the gradient-doped crystal. The maximum average output power amounts to 6.9 W at a pulse repetition rate of 2 kHz, which corresponds to a maximum peak power of ∼585kW. Compared to homogeneous dopant crystals, the slope efficiency and average output power increased by 30.8% and 21.1%, respectively.