Monocrystalline lattice matched Er(0.6 at. %): (Gd, LU)(2)O-3 films with nearly atomically flat surfaces and thicknesses up to 3 Am have been grown on Y2O3 substrates using pulsed laser deposition. The emission cross sections were comparable with the ones of Er:Y2O3 bulk crystals, showing only a marginal spectral broadening. Rib channel waveguiding could be demonstrated after structuring the films with reactive ion etching. Gain measurements have been performed and the results compared with a theoretical gain spectrum. A gain of 5.9 dB/cm could be measured at 1535.5 nm through in-band pumping at 1480 nm. The scattering losses in such a 7 mm long rib waveguide have been determined to be below 4.4 dB at 632.8 nm. An extrapolation to the gain wavelength with the lambda(-4)-Rayleigh law of scattering resulted in losses of 0.2 dB/cm at 1.5 mu m. (C) 2008 Optical Society of America