This paper reports on the synthesis of terbium sesquioxide (Tb2O3) nanoparticles via laser ablation of a solid target in a flowing 95% Ar + 5% H2 binary welding mixture with the use of an ytterbium-doped fiber laser with an average output power of 300 W. We have studied morphological and structural features of the synthesized powder, its thermal behavior, magnetic properties, and densification dynamics during heating to 1450°C in vacuum. The synthesized particles were nearly spherical in shape, with an average size of 13 nm, and had a monoclinic crystal structure, which irreversibly transformed into a cubic structure of $$Ia\overline 3 $$ symmetry as a result of firing in argon or vacuum at temperatures near 750 and 1050°C, respectively. Using temperature-dependent specific magnetization measurements, we determined their paramagnetic Curie temperature (θp = –11.8 K), Curie constant (C = 11.74 K emu/(mol Oe)), and effective magnetic moment (μeff = 9.69μB/Tb). These data suggest that antiferromagnetic exchange interaction between the terbium ions prevails and that the content of Tb4+ ions in the nanopowder is negligible. We have demonstrated the feasibility of producing transparent Tb2O3 ceramics by consolidating presintered nanoparticles via hot isostatic pressing for 2 h at a temperature of 1450°C and pressure of 200 MPa. © 2023, Pleiades Publishing, Ltd.