We designed and developed a compact dual-wavelength and dual-channel time-resolved system for near-infrared spectroscopy studies of muscle and brain. The system employs pulsed diode lasers as sources, compact photomultipliers, and time-correlated single photon counting boards for detection. To exploit the full temporal and dynamic range of the acquisition technique, we implemented an approach based on wavelength space multiplexing: laser pulses at the two wavelengths are alternatively injected into the two channels by means of an optical 2×2 switch. In each detection line (i.e., in each temporal window), the distribution of photon time-of-flights at one wavelength is acquired. The proposed approach increases the signal-to-noise ratio and avoids wavelength cross-talk with respect to the typical approach based on time multiplexing. The instrument was characterized on tissue phantoms to assess its properties in terms of linearity, stability, noise, and reproducibility. Finally, it was successfully tested in preliminary in vivo measurements on muscle during standard cuff occlusion and on the brain during a motor cortex response due to hand movements.