In vivo optical instruments designed for small animal imaging generally measure the integrated light intensity across a broad band of wavelengths, or make measurements at a small number of selected wavelengths, and primarily use any spectral information to characterize and remove autofluorescence. We have developed a flexible hyperspectral imaging instrument to explore the use of spectral information to determine the 3D source location for in vivo fluorescence imaging applications. We hypothesize that the spectral distribution of the emitted fluorescence signal can be used to provide additional information to 3D reconstruction algorithms being developed for optical tomography. To test this hypothesis, we have designed and built an in vivo hyperspectral imaging system, which can acquire data from 400 to 1000 nm with 3 nm spectral resolution and which is flexible enough to allow the testing of a wide range of illumination and detection geometries. It also has the capability to generate a surface contour map of the animal for input into the reconstruction process. In this paper, we present the design of the system, demonstrate the depth dependence of the spectral signal in phantoms and show the ability to reconstruct 3D source locations using the spectral data in a simple phantom. We also characterize the basic performance of the imaging system.