Visible and near-infrared laser radiation based on Er³⁺-doped LiYF₄ (YLF:Er³⁺) crystals has attracted considerable attention because of its important use in biosensing, luminescence thermometry, and anticounterfeiting applications. However, the key issues such as the microstructure and luminescencet mechanism have not been well established yet, impeding the in-depth understanding of optical behavior. Herein, a detailed structural analysis was investigated by the crystal structure prediction method and first-principles calculations. A new tetragonal structure for Er³⁺-doped LiYF₄ is uncovered, which is energetically and dynamically stable. Meanwhile, the complete Stark levels of Er³⁺ ions in a YLF crystal are further revealed based on our newly developed well-established parametrization matrix diagonalization (WEPMD) method. The main spectroscopic parameters of Er³⁺-doped LiYF₄, including fluorescence branching ratios, spontaneous transition rates, line strengths, and radiative lifetimes, were studied systematically. Noticeably, two prominent emission bands peaked at 809 and 990 nm are identified, which originated from the ⁴I9/2 → ⁴I15/2 and ⁴I11/2 → ⁴I15/2 transitions of Er³⁺ ions, respectively. The above results imply that the predicted laser transition channels of Er³⁺-doped LiYF₄ have a potential application in lasing materials. Furthermore, our study provides a new strategy for the design of lasing materials. Copyright © 2021 American Chemical Society.