The microstructures of double-clad Cr4+:YAG crystal fibers grown using a co-drawing laser-heated pedestal growth method were studied by high-resolution transmission electron microscopy and photoluminescence spectroscopy. The core is single-crystalline garnet elongated in [1 1 1] direction, whereas inner cladding a composite of Cr3+:γ-Al2O3 nanocrystals in Cr4+: silicate glass due to YAG/SiO2 inter-diffusion and a high crystal-field-stabilization energy of Cr3+ attained in close packed oxide. Cr4+ fluorescence intensity decreases and shifts to lower wavelength for the inner cladding in comparison with the core.