The focus of this study was the development of a second generation of fiber lasers internally cooled by anti-Stokes fluorescence. The laser consisted of a length of a single-mode fiber spliced to fiber Bragg gratings to form the optical resonator. The fiber was single-moded at the pump (1040 nm) and signal (1064 nm) wavelengths. Its core was heavily doped with Yb, in the initial form of CaF2 nanoparticles, and co-doped with Al to reduce quenching and improve the cooling efficiency. After optimizing the fiber length (4.1 m) and output-coupler reflectivity (3.3%), the fiber laser exhibited a threshold of 160 mW, an optical efficiency of 56.8%, and a radiation-balanced output power (no net heat generation) of 192 mW. On all three metrics, this performance is significantly better than the only previously reported radiation-balanced fiber laser, which is even more meaningful given that the small size of the single-mode fiber core (7.8-µm diameter). At the maximum output power (∼2 W), the average fiber temperature was still barely above room temperature (428 mK). This work demonstrates that with anti-Stokes pumping, it is possible to induce significant gain and energy storage in a small-core Yb-doped fiber while keeping the fiber cool.