A portable (32 cm × 13 cm × 6 cm) laser frequency standard has been constructed by frequency-stabilizing a miniaturized external-cavity diode laser to the Doppler-free spectrum of iodine. Compact structure is achieved using a novel transmission grating. The laser has excellent noise properties, which leads to a high signal-to-noise ratio (SNR) of detection and allows direct observation of the inverse Lamb dips. The frequency stability matches that of iodine-stabilized He-Ne lasers at 633 nm; the relative frequency stability (square root of the Allan variance) follows a slope of 7.9 × 10−12τ−1/2 (10 s < τ < 4000 s). The best stability, 1 ×10−13 (47 Hz), is reached at an integration time of τ = 4000 s. The observed day-to-day repeatability (1σ) is 4 × 10−12 (1.6 kHz). Extensive measurements were made to evaluate the dependence of the laser frequency on the various operational parameters.