A new compact gamma camera for small object imaging has been developed. It consists of a pixelized Nal(T1) scintillator array coupled to a position sensitive photomultiplier tube (Hamamatsu R2486) with a parallel-hole lead collimator. The compact camera has better spatial resolution than Anger camera. The average value of intrinsic spatial resolutions is 2.3 mm (FWHM). The overall spatial resolution (FWHM) is 3, 5 and 6 mm at 0, 2.5 and 3 mm SCD (source-to-collimator distance), respectively. The phantom studies with the compact camera have demonstrated that parallel-hole collimator gamma camera is a practical technique for nuclear medicine application.