In this paper, (Tb_0.7Lu_0.3)₂O₃ magneto-optical transparent ceramics with different ZrO₂ doping levels (0~5 at%) were prepared by hydrogen sintering and sequential HIP technique using ZrO₂ as a sintering aid. The effect of ZrO₂ doping content on the microstructure and optical properties of (Tb_0.7Lu_0.3)₂O₃ ceramics was analyzed. We found that the optimal doping content of ZrO₂ was 3 at%. The transmittance of 3 at% ZrO₂-doped (Tb_0.7Lu_0.3)₂O₃ ceramics at the wavelength of 1064 nm was 74.84 %, and the Verdet constant was approximately 275.28 rad·T⁻¹·m⁻¹ at the wavelength of 650 nm.