We present a method for design and use of a digital mouse phantom for small animal optical imaging. We map the boundary of a mouse model from magnetic resonance imaging (MRI) data through image processing algorithms and discretize the geometry by a finite element (FE) descriptor. We use a validated FE implementation of the three-dimensional (3-D) diffusion equation to model transport of near infrared (NIR) light in the phantom with a mesh resolution optimized for representative tissue optical properties on a computing system with 8-GB RAM. Our simulations demonstrate that a section of the mouse near the light source is adequate for optical system design and that the variation of intensity of light on the boundary is well within typical noise levels for up to 20% variation in optical properties and nodes used to model the boundary of the phantom. We illustrate the use of the phantom in setting goals for specific binding of targeted exogenous fluorescent contrasts based on anatomical location by simulating a nearly tenfold change in the detectability of a 2-mm-deep target depending on its placement. The methodology described is sufficiently general and may be extended to generate digital phantoms for designing clinical optical imaging systems.