This manuscript reports on the effects of the luminescence properties of Er3+ on Al2O3-ZrO2 powder synthesized by the conventional solid-state method. The best conditions found for the calcinations were 1500 °C and 4 h. The structural dependence of the luminescence on Er3+:Al2O3-ZrO2 is associated with phase transformations of the Al2O3-ZrO2 host and presence of the OH group. Green and red emissions at room temperature from the 2H11/2, 4S3/2 → 4I15/2 and 4F9/2 → 4I15/2 levels of Er3+ ions were observed under 482 nm pumping. The green-to-red emission intensity ratios and CIE chromaticity coordinates were determined from emission spectra for the evaluation of light emitted as a function of the Er3+ concentration. The Er3+ luminescence quenching due to group OH and variation in the Er3+ concentration plays an important role in the definition of the luminescent response.