In this work, a heavily Er-doped fiber with an 8 µm core diameter and a numerical aperture of 0.13 was prepared by the modified chemical vapor deposition (MCVD) technique combined with the sol-gel method. The background loss and absorption coefficient at 1530 nm were measured to be 20 dB/km and 128 dB/m, respectively. Thanks to the sol-gel method, the fiber showed a good doping homogeneity, which was confirmed through unsaturable absorption measurement. The net gains of three 25, 45, and 75-cm-long fibers were measured in the range of 1520 to 1600 nm, and the highest gain reached above 23 dB at both 1530 and 1560 nm in 25 and 75-cm-long fibers, respectively. The short-cavity laser performance was measured using centimeter-scale fibers. The maximum output power of 12 mW was demonstrated in a 6.5-cm-long active fiber with a slope efficiency of 20.4%. Overall, the prepared heavily Er-doped silica fiber is a promising item to be applied in a high-repetition-rate or single-frequency fiber laser.