Gd3+ ions were doped in Ce:YAG ceramics as the phosphor material for the high-brightness yellow LED (565-590 nm). Besides the role of spectral modulation, the introduction of Gd3+ ions also exacerbates the thermal quenching effect. To increase its thermal performance, Al2O3 were introduced as the second phase and (Ce0.6%Y69.4%Gd30%)3Al5O12-z% Al2O3 (z=0, 10, 20, 30, 40) composite ceramics were fabricated by vacuum sintering. Their composite microstructures and phase structures were characterized. As the amount of Al2O3 increases from 0 wt% to 40 wt%, there is a noticeable improvement on the thermal conductivity. The thermal stability also increases and the operating temperature of ceramics reduced from 141.1 °C to 132.2 °C. Collaborating composite ceramics with InGaN blue chips, the steady-state luminous efficiency of 40 wt%-Al2O3 yellow LED reaches the highest value of 109.49 lm/W, which is 8.54 % higher than that of Al2O3-free sample. Additionally, scattering behavior and conversion efficiency of composite ceramics with different thicknesses were investigated.