Hand-held optical imagers are developed by various researchers towards reflectance-based spectroscopic imaging of breast cancer. Recently, a Gen-1 handheld optical imager was developed with capabilities to perform two-dimensional (2-D) spectroscopic as well as three-dimensional (3-D) tomographic imaging studies. However, the imager was bulky with poor surface contact () along curved tissues, and limited sensitivity to detect targets consistently. Herein, a Gen-2 hand-held optical imager that overcame the above limitations of the Gen-1 imager has been developed and the instrumentation described. The Gen-2 hand-held imager is less bulky, portable, and has improved surface contact () on curved tissues. Additionally, the forked probe head design is capable of simultaneous bilateral reflectance imaging of both breast tissues, and also transillumination imaging of a single breast tissue. Experimental studies were performed on tissue phantoms to demonstrate the improved sensitivity in detecting targets using the Gen-2 imager. The improved instrumentation of the Gen-2 imager allowed detection of targets independent of their location with respect to the illumination points, unlike in Gen-1 imager. The developed imager has potential for future clinical breast imaging with enhanced sensitivity, via both reflectance and transillumination imaging.