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An Er:Yb:GdAl3(BO3)4 crystal was grown and room-temperature polarized absorption, emission, and gain spectra were investigated. Fluorescence decay curves of Er3+ at 1530 nm and Yb3+ at 1040 nm in the crystal were measured. Efficient laser operation of Er:Yb:GdAl3(BO3)4 crystal at 1.5-1.6 mum was realized. Quasi-continuous-wave output powers of 1.8 W with slope efficiency of 19% and 0.78 W with slope efficiency of 14% were achieved in diode-pumped c-cut and c-cut and a-cut crystals, respectively. The output spectrum and polarization of Er:Yb:GdAl3(BO3)4 laser were also investigated.