We report laser action of a crystal channel-waveguide laser consisting of a diffusion-bonded Yb:YAG-YAG core- cladding structure. By use of diode bars a side-pumped arrangement adapted to the channel-waveguide geometry was realized, resulting in up to 1-W output power and a low threshold. With a rectangular core with a 100-mu m cross section, nearly diffraction-limited performance is demonstrated. The influence of the guiding properties of the channel waveguide on the resonator mode was studied with a nearly concentric resonator. (C) 1999 Optical Society of America.