Laser diodes are widely used in diffuse optical tomography (DOT) systems but are typically expensive and fragile, while light-emitting diodes (LEDs) are cheaper and are also available in the near-infrared (NIR) range with adequate output power for imaging deeply seated targets. In this study, we introduce a new low-cost DOT system using LEDs of four wavelengths in the NIR spectrum as light sources. The LEDs were modulated at 20 kHz to avoid ambient light. The LEDs were distributed on a hand-held probe and a printed circuit board was mounted at the back of the probe to separately provide switching and driving current to each LED. Ten optical fibers were used to couple the reflected light to 10 parallel photomultiplier tube detectors. A commercial ultrasound system provided simultaneous images of target location and size to guide the image reconstruction. A frequency-domain (FD) laser-diode-based system with ultrasound guidance was also used to compare the results obtained from those of the LED-based system. Results of absorbers embedded in intralipid and inhomogeneous tissue phantoms have demonstrated that the LED-based system provides a comparable quantification accuracy of targets to the FD system and has the potential to image deep targets such as breast lesions.