Positron emission tomography (PET) systems designed with multiplexed readout do not usually have the capability to resolve individual intercrystal scatter (ICS) interactions, leading to interaction mispositioning that degrades spatial resolution and contrast. A 3D position sensitive scintillation detector capable of individual ICS readout has been designed and incorporated into a 1 mm3 resolution clinical PET system used for locoregional imaging. Incorporating ICS events increases photon sensitivity by 51.5% compared to using only photoelectric events. A Compton scatter angle error minimization algorithm is used to estimate the first ICS interaction location for accurate line-of-response pairing of coincident photons. An optimal scatter angle error threshold of 15 degrees is used to discard ICS events with a high mismatch between energy-derived and position-derived intercrystal scatter angles. Finally, positioning rather than rejecting ICS events boosts peak contrast to noise ratio by 8.1%, and allows for an equivalent dose reduction of 12% while maintaining equivalent image quality.