Er³⁺-doped CaYAlO₄ crystals with the doping concentration (atomic fraction) of 15% and 30% were successfully grown by Czochralski method. The polarized spectral and laser properties of Er∶CaYAlO₄ crystals were studied. The polarized absorption spectra, polarized emission spectra and fluorescence decay curves were measured at room temperature. The disorder of CaYAlO₄ crystal results in broadband characteristics of absorption and emission spectra. The emission cross section of 15% Er∶CaYAlO₄ is determined to be 1.22×10^-20 cm² at 2 712 nm for σ polarization and 0.71×10^-20 cm² at 2 754 nm for π polarization, with a full width at half maximum (FWHM) of 152 and 167 nm, respectively. As Er³⁺ concentration increases, fluorescence lifetime of ⁴I₁₁/2 and ⁴I₁₃/2 energy levels decreases in different degrees, and lifetime ratio (τ_lower/τ_upper) greatly reduces. The energy transfer upconversion ETU1 not only suppresses self-termination effect but also improves quantum efficiency of 2.7 μm radiative transition. Under 974 nm LD excitation, laser property for output couple mirror with a transmittance of 1.5% is best. The maximum output power is 358 mW at 2 720 nm with a slope efficiency of 15.4% in c-cut 15% Er∶CaYAlO₄ crystal.