The SLD upgrade CCD vertex detector (VXD3) is described. Its 307 million pixels are assembled from 96 3.2 Mpixel CCDs of 13 cm{sup 2} each. The system has evolved from the pioneering CCD vertex detector VXD2, which has operated in SLD since 1992. The CCDs of VXD3 are mounted on beryllium ladders in three cylinders, providing three space point measurements along each track of about 5 microns resolution in all three co-ordinates. Significant improvements are achieved with VXD3 in impact parameter resolution (about a factor of two) and acceptance ({approximately}20%) through optimized geometry and reduced material. New readout electronics have been developed for this system.