This article describes the design, rationale, and system performance of a rapid imaging near-infrared diffuse optical tomography system that is capable of collecting tomographic measurements at video rate. Data-acquisition speed of 35 frames/s is achieved by spectral encoding of the sources, followed by spectral decoding of all detection channels in parallel in a spectrometer and using charge-coupled-device (CCD)-based detection. The combination of spectral decoding of the source lights horizontally in a spectrometer and spatial separation of the detector positions vertically at the entrance slit provides separate data for the entire set of source-detector pairs which can be acquired at the frame rate of the CCD camera. The described system features eight sources at an overall 785 nm center band with an average of 1.25 nm spacing in wavelength and eight detectors evenly deployed in a 27 mm array designed for imaging with small animal tissues. The system performs with localization error of 2.5 mm, and absorption recovering uncertainty of 16.7%. The point spread function of the imaging is estimated to be 4.1 mm when near to the edge and 10.4 mm at the center of the imaging array. Capture of transient changes of absorption coefficient in a dynamic phantom are also presented.