For the past decade, erbium-doped integrated waveguide amplifiers and lasers have shown excellent potential for on-chip amplification and generation of light at the important telecommunication wavelength regime. However, Er-based integrated devices can only provide small gain per unit length due to the severe energy-transfer between the Er-ions at high concentration levels. Therefore, active ion concentrations have been limited to <1% levels in these devices for optimal performance. Here, we show an efficient and practical way of fabricating Er-doped Al2O3 with Er-concentration as high as ∼3.5% before concentration quenching starts to limit the C-band emission in our material. The Er-doped Al2O3 was fabricated by engineering the distribution of the Er-ions in Al2O3 with the atomic layer deposition (ALD) technique. By choosing a proper precursor for the fabrication of Er2O3, the steric hindrance effect was utilized to increase the distance between the Er-ions in the lateral direction. In the vertical direction, the distance was controlled by introducing subsequent Al2O3 layers between Er2O3 layers. This atomic scale control of the Er-ion distribution allows us to enhance the photoluminescence of our Er:Al2O3 material by up to 16 times stronger when compared to the case where the Er-concentration is ∼0.6%. In addition, long lifetime of approximately 5 ms is preserved in the Er-ions even at such high concentration levels. Thus, our optimized ALD process shows very promising potential for the deposition of optical gain media for integrated photonics structures.