A PET block detector module using an array of sub-millimeter lutetium oxyorthosilicate (LSO) crystals read out by an array of surface-mount, semiconductor photosensors has been developed. The detector consists of a LSO array, a custom acrylic light guide, a 3 × 3 multi-pixel photon counter (MPPC) array (S10362-11-050P, Hamamatsu Photonics, Japan) and a readout board with a charge division resistor network. The LSO array consists of 100 crystals, each measuring 0.8 × 0.8 × 3 mm3 and arranged in 0.86 mm pitches. A Monte Carlo simulation was used to aid the design and fabrication of a custom light guide to control distribution of scintillation light over the surface of the MPPC array. The output signals of the nine MPPC are multiplexed by a charge division resistor network to generate four position-encoded analog outputs. Flood image, energy resolution and timing resolution measurements were performed using standard NIM electronics. The linearity of the detector response was investigated using gamma-ray sources of different energies. The 10 × 10 array of 0.8 mm LSO crystals was clearly resolved in the flood image. The average energy resolution and standard deviation were 20.0% full-width at half-maximum (FWHM) and 5.0%, respectively, at 511 keV. The timing resolution of a single MPPC coupled to a LSO crystal was found to be 857 ps FWHM, and the value for the central region of detector module was 1182 ps FWHM when 10% energy window was applied. The nonlinear response of a single MPPC when used to read out a single LSO was observed among the corner crystals of the proposed detector module. However, the central region of the detector module exhibits significantly less nonlinearity (6.5% for 511 keV). These results demonstrate that (1) a charge-sharing resistor network can effectively multiplex MPPC signals and reduce the number of output signals without significantly degrading the performance of a PET detector and (2) a custom light guide to permit light sharing among multiple MPPC and to diffuse and direct scintillation light can reduce the nonlinearity of the detector response within the limited dynamic range of a typical MPPC. As a result, the proposed PET detector module has the potential to be refined for use in high-resolution PET insert applications.