We report on the fabrication and optical characterization of erbium-ytterbium co-doped aluminum oxide (Al2O3:Er3+:Yb3+) waveguides using low-cost, low-temperature deposition and etching steps. We deposited Al2O3:Er3+:Yb3+ films using reactive co-sputtering, with Er3+ and Yb3+ ion concentrations ranging from 1.4-1.6 × 1020 and 0.9-2.1 × 1020 ions/cm3, respectively. We etched ridge waveguides in 85% pure phosphoric acid at 60°C, allowing for structures with minimal polarization sensitivity and acceptable bend radius suitable for optical amplifiers and avoiding alternative etching chemistries which use hazardous gases. Scanning-electron-microscopy (SEM) and profilometry were used to assess the etch depth, sidewall roughness, and facet profile of the waveguides. The Al2O3:Er3+:Yb3+ films exhibit a background loss as low as 0.2 ± 0.1 dB/cm and the waveguide loss after structuring is determined to be 0.5 ± 0.3 dB/cm at 1640 nm. Internal net gain of 4.3 ± 0.9 dB is demonstrated at 1533 nm for a 3.0 cm long waveguide when pumped at 970 nm. The material system is promising moving forward for compact Er-Yb co-doped waveguide amplifiers and lasers on a low-cost silicon wafer-scale platform.