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 (~30%) 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 (~86%) 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.