This study presents the first system characterization results of a novel 1 mm resolution small animal PET system based on cadmium zinc telluride (CZT). The 3-D position-sensitive dual-CZT detector module and readout electronics previously developed in our lab were scaled up to complete significant portions of the final PET system. This sub-system was configured as two opposing detection panels containing a total of twelve 40 mm × 40 mm × 5 mm monolithic CZT crystals for proof of concept. System-level characterization studies, including optimizing the trigger threshold of each channel's comparators, were performed to bring the system to an acceptable operating point. 68Ge and 137Cs radioactive isotopes were used to characterize the anode energy resolution of all channels in the system. The mean measured global 511 keV photopeak energy resolution over 240 anode channels was found to be 8.03 ± 0.96% FWHM.