With recent development of solid-state lasers, especially high-power fiber lasers in intelligent manufacturing, scientific research and the other fields are increasingly widespread. Eliminating the reflected light to protect the optical path system and stabilize the laser output becomes a critical issue. Magneto-optical materials with a high Verdet constant and a large size are an essential optical element for developing high-performance optical isolators, which can significantly shorten the length of magneto-optical medium, thus enabling the development of integrated and miniaturized optical isolators. Terbium (III) oxide has no absorption peak in the range 500?1 500 nm and its Verdet constant is 3.5 times greater than that of commercial terbium gallium garnet single crystals. Magneto-optical transparent ceramics are a new inorganic transparent optical functional material, and its optical transparency comparable to that of single crystals and glasses, and it has the advantages of adjustable composition and structure of polycrystalline ceramics.Tb2O3 is considered as a promising candidate medium for magneto-optical isolators due to its superior magneto-optical properties. However, challenges in the preparation are the oxidation of trivalent terbium oxide powder in air, and the reversible phase transition at 1 600 ℃, 2 167 ℃ and 2 370 ℃. To address the problems above, Tb2O3 crystals were grown via low-temperature flux growth, the optical floating zone method and the supercritical solvothermal method. However, Tb3+ ions are easily oxidized, undergoing multistage phase transitions at 1 550?2400 ℃ (i.e., the melting point, which makes it difficult to grow Tb2O3 single crystal from the melt. As a representative of ceramic process routes, rare-earth ions stabilized Tb2O3, TAG and TGG transparent ceramics are prepared via vacuum sintering, hot pressed sintering or NC-PLSH technology. This review represented the development, technologic process and key difficulties of Tb2O3 crystals and ceramics. Tb2O3 single crystals can be grown by flux and floating zone methods, but it is difficult to improve the crystal size, optical quality, and production efficiency to the application level. Tb2O3 crystal was prepared by a flux method, but its crystal size was only 5 mm×5 mm×2 mm. Compared with the crystal growth, a transparent ceramic technology has advantages in preparing large size and optical grade bulk materials. In order to stabilize the phase structure of terbium oxide, yttria-stabilized Tb2O3 ceramics was prepared by a self-propagating high-temperature method and vacuum sintering. Zirconia is used as a sintering aid to reduce the sintering temperature and accelerate the mass transport process in the ceramic sintering. Preparation schemes of transparent ceramics bring a prospect for Tb2O3 bulk materials.Summary and prospects Tb2O3 is a magneto-optical material with the maximum Verdet constant in visible bands. Its Verdet constant at 633 nm is 476 rad·T?1m?1, which is 3.5 times greater than that of commercial TGG single crystal. However, the ultra-high melting point and multistage reversible phase transition of Tb2O3 make it difficult to prepare Tb2O3 crystals and ceramics by a conventional method. This review compared solid-solution method combined with vacuum sintering and nano-crystalline pressure-less sintering in H2 atmosphere for preparing Tb2O3 ceramics involving yttrium-stabilized terbium oxide, lutetium-stabilized terbium oxide and zirconium oxide and lanthanum-doped terbium oxide ceramics, etc.. The existing progress in magneto-optical Tb2O3 transparent ceramics is described. The in-line transmittance of Tb2O3 ceramics with the diameter of 10 mm is close to 80%. Tb2O3 ceramics with the large diameter of >30 mm can be fabricated. The future work is to improve the optical quality of Tb2O3 ceramics, further develop the large-diameter ceramics, and evaluate the thermal effects of Tb2O3 ceramics in high power lasers.1) The sinterability (i.e., purity, particle size and homogeneity) of as-synthesized powder is a key factor in the preparation of highly transparent ceramics. This is a research aspect to further explore the process of wet chemical co-precipitation and accurately control the morphology and uniformity of powder.2) From the perspective of ceramic forming, wet molding is easy to obtain uniform green compact with connected pores, which is beneficial to producing large-size and high-quality transparent ceramics.3) Hot isostatic pressing sintering is an effective way to eliminate micro-pores. Terbium ion can be effectively maintained in +3 valence charge via sintering in H2 atmosphere. Optical grade Tb2O3 ceramics are expected to obtain by NC-PLSH technology and HIP post treatment.4) In order to meet the demands of high-power laser system, it is crucial to evaluate the thermal depolarization and thermal lensing effects of Tb2O3 ceramics used as an optical isolator medium in high energy lasers as well as the thermal compensation techniques adopted.