Diffuse reflectance spectroscopy has been previously explored as a promising method for providing real-time visual maps of tissue composition to help surgeons determine breast lumpectomy margins and to ensure the complete removal of a tumor during surgery. We present the simple design, validation, and implementation of a compact and cost-effective spectral imaging system for the application of tumor margin assessment. Our new system consists of a broadband source with bandpass filters for illumination and a fabricated custom 16-pixel photodiode imaging array for the detection of diffuse reflectance. The system prototype was characterized in tissue-mimicking phantoms and has an SNR of greater than 40 dB in phantoms, animals, and human tissue. We show proof-of-concept for performing fast, wide-field spectral imaging with a simple, inexpensive design. The strategy also allows for the scaling to higher pixel number and density in future iterations of the system.© (2012) COPYRIGHT Society of Photo-Optical Instrumentation Engineers (SPIE). Downloading of the abstract is permitted for personal use only.