The objective of the presented study was to investigate the usefulness of transparent, sintered yttrium oxide for application as optical isolators, i.e., materials with high Verdet constant. The study utilizes the magneto-optical Faraday effect. To obtain yttrium oxide sinters, a commercial Y2O3 powder was applied, with LiF added to facilitate sintering. As a result of hot-press sintering and heating, transparent, dense sinters were obtained. The structure and morphology of the powders and bulk samples and the optical properties of the latter were investigated by means of X-ray diffraction, scanning electron microscopy, visible and near-infrared reflectance spectroscopy, and a study of magneto-optical (Faraday) effects. Measurements of the Faraday effect in the wavelength range of 500–1000 nm indicate high Verdet constants for the above-described materials, which means that they can be effectively applied in laser optics.