Trivalent praseodymium (Pr3+)-doped materials have been extensively used in high-resolution laser spectroscopy, owing to their outstanding conversion efficiencies of plentiful transitions in the visible laser region. However, to clarify the microstructure and energy transfer mechanism of Pr3+-doped host crystals is a challenging topic. In this work, the stable structures of Pr3+-doped yttrium orthoaluminate (YAlO3) have been widely searched based on the CALYPSO method. A novel monoclinic structure with the Pm group symmetry is successfully identified. The Pr3+ impurity can precisely occupy the Y3+ position and get incorporated into the YAlO3 (YAP) host crystal with a Pr3+ concentration of 6.25%. The result of the electronic band structure reveals a 3.62 eV band gap, which suggests a semiconductor character of YAP:Pr. Using our developed well-established parametrization matrix diagonalization (WEPMD) method, we have systematically analyzed the energy level scheme and proposed a set of newly improved parameters. Additionally, the energy transfer mechanism of YAP:Pr is clarified by deciphering the numerical electric dipole and magnetic dipole transitions. The popular red emission at 653 nm is assigned to the transition 3P0 → 3F2, while the transition 3P0 → 3H4 with a large branching ratio is predicted to be a good laser channel. Many promising emission lines for laser actions are also obtained in the visible light region. Our results not only provide important insights into the energy transfer mechanisms of rare-earth ion-doped materials but also pave the way for the implementation of new types of laser devices.