Transparent Nd:YAG/YAG composite ceramics are synthesized by solid-state reaction method using high-purity Y2O3, Al2O3, and Nd2O3 powders as raw materials. The mixed powder compacts are sintered at 1780 C for 10 h under vacuum and annealed at 1450 C for 20 h in air. The Nd:YAG/YAG ceramics exhibit a pore free structure with an average grain size of about 30 \mum. The microstructure of the Nd:YAG/YAG composite transparent ceramics is studied and there is no interface between Nd:YAG and YAG ceramics. The Nd ion distribution in one grain is also studied, which shows that there is no segregation of Nd ions as in Nd:YAG crystals.