A new ultrahigh-resolution photoemission electron microscope called PEEM3 is being developed and built at the Advanced Light Source (ALS). An electron mirror combined with a much-simplified magnetic dipole separator is to be used to provide simultaneous correction of spherical and chromatic aberrations. It is installed on an elliptically polarized undulator (EPU) beamline, and will be operated with very high spatial resolution and high flux to study the composition, structure, electric and magnetic properties of complex materials. The instrument has been designed and is described. The instrumental hardware is being deployed in 2 phases. The first phase is the deployment of a standard PEEM type microscope consisting of the standard linear array of electrostatic electron lenses. The second phase will be the installation of the aberration corrected upgrade to improve resolution and throughput. This paper describes progress as the instrument enters the commissioning part of the first phase. © 2007 American Institute of Physics.