V/t have developed a PET insert system that can be integrated into a clinical PET-CT scanner to improve its image resolution when imaging a patient for head and neck cancer. The system consists of 28 detector modules arranged into two half rings (24.6 cm in diameter). Each detector consists of an array of 13x13 LSO crystals each measuring 2x2x5 mm3, a 2.8 mm thick light-guide, and a R8900-M16 PMT (Hamamatsu, Japan). The 16 anode outputs of a PMT are multiplexed to produce 4 position-encoded signals that resemble the output of a typical block detector in the PET scanner. An active switch board was designed to select signals from either the insert detectors or scanner detectors and feed the output signals to system electronics for event processing, allowing the scanner to switch between its normal operation and the insert mode without shutting down the system. A 3-D translation stage supports and positions the insert concentrically inside the scanner. The axial extend of the insert detectors is 54 mm, centered within the first 3 detector block rings of the scanner. Initial setup of the PET insert system requires the identification of crystal lookup table and photopeak locations, timing alignment of the insert detectors with the scanner. Once completed, the scanner can be switched between the insert and normal modes within a few minutes. Coincidences are sorted into insert-insert (II), insert-scanner (IS) and scanner-scanner (SS) types of events using a custom sorting code. We have developed 2D FBP and 2D ML-EM algorithms to reconstruct single-slice rebinned sinograms, and a 3D OS-EM algorithm to jointly estimate the images using all 3 types of events. Initial tests show a mean, max and min energy resolution of 12.36%, 18.57% and 9.45% FWHM at 511 keV, respectively. Image resolution measured by 22Na point sources is ∼2-3 mm FWHM and improved from 4-5mm FWHM for scanner system. Full system performance is currently being evaluated.