A picosecond laser was used to laser etch the surface of (Ce,Gd)∶YAG-Al₂O₃ composite-phase phosphor ceramics. The phosphor ceramics were excited using blue light-emitting diode (LED) transmission to systematically study the effect of laser etching on the surface morphology of the phosphor ceramics and the luminescence performance of the encapsulated white LED (WLED) devices. The results showed that the ablation area and depth of the phosphor ceramics increased with the number of laser treatments. An ablation structure with diameter of 46.0 μm and depth of 5.69 μm was formed on the surface of the phosphor ceramics after five laser ablation treatments. Under the same blue LED excitation conditions, the phosphor ceramics transmitting blue light and their conversion to yellow-green light intensity ratio decreased with an increase in the number of ablations. The luminous efficiency (LE) of the encapsulated WLED device increased from 83.05 lm/W to 86.88 lm/W, and the correlated color temperature (CCT) decreased from 6329 K to 5626 K. Phosphor ceramics both sides are completed laser ablation than single-side laser ablation, the color temperature of the encapsulated WLED device decreased from 5555 K to 5159 K, and the color coordinates moved from (0.3311, 0.4005) to (0.3455, 0.4226). This indicates that an effective control of the luminescence performance of phosphor ceramics can be achieved with picosecond laser ablation treatment of their surface.