The purpose of this study was to investigate an optimal readout for a high-resolution compact gamma camera with maximum performance in crystal element identifications. The compact camera is based on a pixellated Nal(Tl) crystal with 1.2 mm pixel size coupled to a 5" Hamamatsu R3292 PSPMT. A conventional resistive-chain readout was initially developed for the camera. Then a novel subtractive resistive readout developed was utilized to optimize the performance of the camera. The performance of the camera was evaluated by raw flood images of a 137Cs source. The results show that the conventional resistive readout results in a significant shrinkage of the useful field-of- view (UFOV) of the detector with a maximum of resolvable crystal elements of 64times64, which is about 89% of the active-area of the PSPMT's (~10 cm). The subtractive resistive readout can maximize the crystal element identifications up to 71times71 while improve the UFOV of the detector up to almost the full active- area of the PSPMT's. In the central region of the camera, the subtractive resistive readout also improve the peak-valley ratio of the crystal elements from 1.5:1 to 2:1 as compared the conventional resistive readout. The phantom and in vivo mouse imaging studies demonstrate that the compact camera with subtractive resistive readout can provide very good performance for high-resolution SPECT. We concluded that the subtractive resistive readout is an effective approach for an optimal readout for the development of high-resolution compact gamma cameras.