A diode-pumped Yb3+:YAl3(BO3)4 (Yb:YAB) laser system was demonstrated with continuous wave (CW) and pulsed output. The polarized CW outputs and femtosecond mode-locked lasers with semiconductor saturable-absorber mirrors (SESAM) at the fundamental wavelength were measured. For the CW output, polarization ratios were 88.1% (for e-ray) and 87.2% (for o-ray). For the mode-locked system, polarization ratio reached 38.5%, and the repetition frequency was 117.6 MHz.