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Detector blurring and non-ideal collimation decrease the spatial resolution of the single-photon emission computed tomography (SPECT) images. Iterative reconstruction algorithms such as ordered subsets expectation maximization (OSEM) can incorporate degrading factors during reconstruction. We investigated the quantitative errors associated with poor SPECT resolution and evaluated the importance of two-dimensional (2D) and three-dimensional (3D) resolution recovery by modelling system response during iterative image reconstruction.Different phantoms consisted of the NURBS-based cardiac-torso (NCAT) liver phantom with small tumors, the Zubal brain phantom and the NCAT heart phantom were used in this study. Monte Carlo simulation was used to create SPECT projections. Gaussian functions were used to model collimator detector response (CDR). Modeled CDRs were applied during OSEM. Both noise-free and noisy projections were created.Even with noise-free projections, conventional OSEM algorithm provided limited quantitative accuracy compared to both 2D and 3D resolution recovery. The 3D implementation of resolution recovery, however, yielded superior results compared to its 2D implementation. For the liver phantom, the ability to distinguish small tumors in both transverse and axial planes was improved. For the brain phantom, gray to white matter activity ratio was increased from 3.14±0.04 in simple OSEM to 3.84±0.06 in 3D OSEM. For the NCAT heart phantom, 3D resolution recovery, results in images with thinner wall and higher contrast for different noise levels.There are considerable quantitative errors associated with CDR, especially when the size of the target is comparable with the spatial resolution of the system. Between different reconstruction algorithms, 3D OSEM that consider the 3D nature of CDR, improve both the visual quality and the quantitative accuracy of any SPECT studies.