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A magnetic resonance (MR) compatible positron emission tomography (PET) insert has been developed in our laboratory for simultaneous small animal PET/MR imaging. This system is based on lutetium oxyorthosilicate (LSO) scintillator arrays with position-sensitive avalanche photodiode (PSAPD) photodetectors. The PET performance of this insert has been measured. The average reconstructed image spatial resolution was 1.51 mm. The sensitivity at the center of the field of view (CFOV) was 0.35%, which is comparable to the simulation predictions of 0.40%. The average photopeak energy resolution was 25%. The scatter fraction inside the MRI scanner with a line source was 12% (with a mouse-sized phantom and standard 35 mm Bruker 1 H RF coil), 7% (with RF coil only) and 5% (without phantom or RF coil) for an energy window of 350-650 keV. The front-end electronics had a dead time of 390 ns, and a trigger extension dead time of 7.32 mus that degraded counting rate performance for injected doses above ~0.75 mCi (28 MBq). The peak noise-equivalent count rate (NECR) of 1.27 kcps was achieved at 290 muCi (10.7 MBq). The system showed good imaging performance inside a 7-T animal MRI system; however improvements in data acquisition electronics and reduction of the coincidence timing window are needed to realize improved NECR performance.