Compact design is very important for embedded systems such as wireless sensor nodes, RFID tags and mobile devices because of their limited hardware (H/W) resources. This paper proposes a compact H/W implementation for the KASUMI block cipher, which is the 3GPP standard encryption algorithm. In [8] and [9], Yamamoto et al. proposed a method of reducing the register size for the MISTY1 FO function (YYI-08), and implemented very compact MISTY1H/W. In this paper we aim to implement the smallest KASUMIH/W to date by applying a YYI-08 configuration to KASUMI, whose FO function has a similar structure to that of MISTY1. However, we discovered that straightforward application of YYI-08 raises problems. We therefore propose a new YYI-08 configuration improved for KASUMI and the compact H/W architecture. The new YYI-08 configuration consists of new FL function calculation schemes and a suitable calculation order. According to our logic synthesis on a 0.11-µm ASIC process, the gate size is 2.99 K gates, which, to our knowledge, is the smallest to date.