Cree has developed a new ultra-compact light emitting diode (LED) luminaire capable of providing high efficacy with excellent color quality that can lead to significant energy savings in today‟s commercial and retail applications. This success was based on an integrated development effort tailoring the LED component characteristics, optics, thermal management and driver design for the small footprint to achieve an overall system efficiency of ≥ 70%. A new LED component was designed to provide high brightness and efficacy in a form factor that allowed for a small directional beam with a luminaire housing design able to dissipate the heat effectively using a small physical envelope. A very compact, 90% efficient driver was developed to meet the system performance while not taking away any thermal mass from the heat sink. A 91% efficient secondary optics was designed to maximize efficiency while providing a smooth beam. The reliability of the new LED component was robust under accelerated testing conditions. Luminaires were assembled integrating the novel LED component, secondary optics, heat sink and driver technology to demonstrate the system improvement. Cree has successfully completed this project by developing an ultra-compact LED luminaire that provided 380 lumens at a correlated color temperature (CCT) of …