A new ion composition and three-dimensional velocity analyzer, 3-Dimensional ion velocity and mass Imager (3DI), measures 3D velocity distribution functions (VDFs) for each major ion species in Earth's topside ionosphere. The 3DI instrument is composed of a miniaturized electrostatic analyzer (ESA) and a deflector, backed by a static, magnet-based, mass spectrometer. We have developed a micro-pixel read-out anode technique that significantly saves power in the particle detection system, and integrated it into an imaging microchannel plate (MCP). We tested the ESA and deflector, magnet-based mass spectrometer, and anode in the laboratory to demonstrate the 3DI prototype's performance. We have applied numerical calculations to evaluate and discuss 3DI's performance and dynamic range. Due to complexities associated with imaging 3D distribution functions during fast spacecraft motion, we also discuss the operation strategy for 3DI to capture and resolve the VDF within the field of view. Once applied to flight investigations, the 3DI observations will be extremely useful in identifying ionosphere composition, mass-dependent ion transport such as upflows, and mass-dependent ion heating. Furthermore, the precise measurement of non-thermal plasma VDFs provides information to improve ionospheric environment modeling and ground-based radar observations.