We have developed a novel system for confocal microscopy-the Virtual Pinhole Microscope-that promises a number of advantages over conventional confocal instruments: reduced cost, faster imaging, improved efficiency and sensitivity, improved reliability and much greater flexibility. Phase I work established the feasibility of all component systems, and the functionality of the integrated system. Proposed Phase II work will complete the technical development cycle and result in a powerful and low-priced product. We will continue to develop a novel system for high performance illumination, patterned in time and space. We will refine and fabricate a system for high performance data acquisition and processing, designed to support real-time confocal imaging. We will extend, further develop, evaluate and validate both static and adaptive algorithms used to reconstruct confocal images from a time series of spatially sub-sampled images. We will integrate component systems, to produce two configurations of the instrument. Phase III work will include development of documentation and a beta test program. The confocal systems developed with SBIR support will allow the collection of high quality confocal images in fluorescence, reflectance and transmission modes with equipment that can be inexpensively retrofit to existing microscopes, and will enable important new application.