We demonstrate the feasibility of time-resolved diffuse reflectance measurements at small source-detector separations using a single-photon avalanche diode operated in time-gated mode. Photon time distributions at an interfiber distance of 2 mm were obtained on a homogeneous tissue phantom with a dynamic range of 10(6) and collecting photons at arrival times up to 4 ns. Moreover, we were able to detect a local inhomogeneity deeply buried within a diffusive medium with better spatial resolution, higher signal intensity, and same contrast of a larger (20 mm) interfiber distance. Finally, the proposed approach proved valuable to detect in vivo a task-related brain activation.