In this study, a sparse multiple-input multiple-output radar system with difference co-array processing is presented. It consists of two non-uniform transmitter arrays in split configuration and a symmetrical hybrid receiver array. A combination of a periodically thinned array and two non-uniform sub-arrays is used to construct the receiver structure. A low-cost three-step optimization procedure is proposed to synthesize the array arrangement with system constraints. In addition, a combination of fast Fourier transform (FFT) and MUltiple SIgnal Classification (MUSIC) techniques is applied for a range/direction-of-arrival estimation with low computational effort. High angular resolution is achieved in the MUSIC spectrum by implementing a difference co-array concept together with spatial smoothing. A thinning rate in excess of 95% is demonstrated. Lastly, the performance of the proposed system is validated by measurements of point scatterers and extended objects.