The luminescence efficiency of Ce³⁺ in garnet phosphors is among the most stable for luminescent materials. Still, it has been observed to be reduced at high incident blue flux (known as droop) due to nonlinear processes caused by the high lumen density inside the materials. Herein, it is shown that in the case of Ce³⁺‐doped garnet concentrator rods, the droop can be explained by excited‐state absorption (ESA) of mainly green Ce³⁺ luminescence light that is trapped inside the rods. ESA spectroscopy and thermally stimulated luminescence (TSL) measurements show that electrons are promoted from the 5d₁ excited state of Ce³⁺ to the conduction band by ESA and may be either captured by traps or may recombine with Ce⁴⁺ sites to give excited Ce³⁺ ions giving rise to luminescence. Therefore, the droop depends on the concentration of Ce⁴⁺ ions present, which can be influenced and optimized by varying the processing conditions of the samples. Guided by these results, a model is developed that describes the optical processes. It is used to analyze the observed droop behavior in block‐shaped samples with and without extraction optics.