(Dy_0.7Y_0.25La_0.05)₂O₃ magneto-optical transparent ceramics were successfully fabricated by pressureless sintering in reductive H₂ atmosphere (PLSH). The raw powder of (Dy_0.7Y_0.25La_0.05)₂O₃ was synthesized by a modified self-propagating high-temperature synthesis (SHS) and sintered to transparent ceramics at 1400–1600 °C in a flowing H₂ atmosphere, showing good sinterability of the as-synthesized raw powder. The magneto-optical Verdet constant of (Dy_0.7Y_0.25La_0.05)₂O₃ transparent ceramics was measured to be −191.57 rad/(T·m) at a wavelength of 632.8 nm. In this magneto-optical material of (Dy_0.7Y_0.25La_0.05)₂O₃, relative cheaper Dy and Y were used to replace Tb, and the low cost and good magneto-optical property showed the advantage of application on Faraday isolators (FIs) and Faraday rotators (FRs).