A reliable and reproducible deposition process for the fabrication of Al2O3 waveguides with losses as low as 0.1 dB/cm has been developed. The thin films are grown at ~ 5 nm/min deposition rate and exhibit excellent thickness uniformity within 1% over 50times50 mm2 area and no detectable OH- incorporation. For applications of the Al2O3 films in compact, integrated optical devices, a high-quality channel waveguide fabrication process is utilized. Planar and channel propagation losses as low as 0.1 and 0.2 dB/cm, respectively, are demonstrated. For the development of active integrated optical functions, the implementation of rare-earth-ion doping is investigated by cosputtering of erbium during the Al2O3 layer growth. Dopant levels between 0.2-5times1020 cm-3 are studied. At Er3+ concentrations of interest for optical amplification, a lifetime of the 4I13/2 level as long as 7 ms is measured. Gain measurements over 6.4-cm propagation length in a 700-nm-thick Al2O3:Er3+ channel waveguide result in net optical gain over a 41-nm-wide wavelength range between 1526-1567 nm with a maximum of 5.4 dB at 1533 nm.