In this paper, we introduce a compact 6 × 8 channel multiple-input multiple-output frequency-modulated continuous-wave radar system capable of determining the three-dimensional positions of targets despite utilizing a linear virtual array. The compact system, containing two cascaded radar transceiver ICs, has 48 virtual channels. We conduct a direction of arrival estimation with these virtual channels to determine the azimuth angle. To overcome the spatial limitation of the linear array, we use frequency-steered transmit antennas, which vary their main lobe direction during the frequency chirp, allowing the elevation angle to be determined by using a sliding window fast Fourier transform algorithm. In this study, we present the system’s concept along with the associated signal processing. By taking measurements in different scenarios, each with differently placed corner reflectors, we investigate the capability of the system to separate adjacent targets concerning range, azimuth, and elevation. These measurements are additionally employed to point out the design trade-offs inherent to the system.