Erbium-ion-doped lithium niobate (LN) microcavity lasers working in the communication band have attracted extensive attention recently. However, their conversion efficiencies and laser thresholds still have significant room to improve. Here, we prepared microdisk cavities based on erbium-ytterbium-co-doped LN thin film by using ultraviolet lithography, argon ion etching, and a chemical-mechanical polishing process. Benefiting from the erbium-ytterbium co-doping-induced gain coefficient improvement, laser emission with an ultralow threshold (∼1 µW) and high conversion efficiency (1.8 × 10-3%) was observed in the fabricated microdisks under a 980-nm-band optical pump. This study provides an effective reference for improving the performance of LN thin-film lasers.