We report the highly efficient continuous-wave diode-pumped laser operation of Er, Yb:GdAl3(BO3)4 crystal. Absorption and stimulated emission spectra, emission lifetimes, and efficiencies of energy transfer from Yb3+ to Er3+ ions were determined. A maximal output power of 780 mW was obtained at 1531 nm at absorbed pump power of 4 W with slope efficiency of 26%.