Graded-Index (GRIN) lenses with a diameter of 125 μm are presented. This diameter enables the assembly of the GRIN lenses onto an optical micro-system using the same passive alignment grooves as used for the light carrying optical fibers. In contrast to refractive lenses, GRIN lenses have flat endfaces and the focal distance of a GRIN lens is defined by its length. Therefore, GRIN lenses can be diced from a selected multimode optical fiber with a regular wafer dicing machine. The effects of the resulting surface roughness are reduced by immersing the optical parts into index matching oil, which can not be applied for refractive lenses. This has a further advantage since an anti-reflective coating becomes dispensable. The coupling efficiency of a collimator set-up using the GRIN lenses is studied using paraxial ray calculations. The calculated minimal coupling losses of less than 0.3 dB are in excellent agreement with the measured results. Losses smaller than 2 dB over a coupling length of 2 mm have been measured. © 2006 Optical Society of America.