Physical Sciences Inc. (PSI) proposes to develop and commercialize a new type of ophthalmoscope based upon the principles of the confocal Scanning Laser Ophthalmoscope (SLO). Though the confocal SLO has many valuable diagnostic capabilities, commercially available devices are large, expensive and are impractical for hand-held applications. In the Phase I program, PSI designed and demonstrated a confocal line scanning laser imaging device, or LSLO, using a simpler, compact optical design, standard low-cost components, and fewer moving parts that current SLO instruments. Based on this work, the requirements for a compact prototype have been specific that is similar in size and weight to commercial hand-held digital video cameras. In phase II, we will develop and clinically test a compact engineering prototype device for several clinical applications and commercial development. This device will be suitable for fundus examination under a wide variety of conditions, including screening and field and emergency medical uses. The Phase II prototype will incorporate additional capabilities including dual wavelength and stereoscopic imaging, and will be useful for examination of the anterior segment of the eye.