We have developed a 532 nm iodine stabilized laser system that may be suitable for the LISA mission (Laser Interferometer Space Antenna) or other future spaceborne missions. This system is based on an externally frequency-doubled Nd:YAG laser source and uses the molecular transfer spectroscopy technique for the frequency stabilization. This technique has been optimized for LISA: compactness (less than 1.1×1.1m2), vacuum compatibility, ease of use and initialization, minimization of the number of active components (acousto-optic modulators are both used for frequency shifting and phase modulating the pump beam). By locking on the a10 hyperfine component of the R(56)32-0 transition, we find an Allan standard deviation (σ) of 3×10-14 at 1 s and σ<2×10-14 for 20s≤τ≤103s. In terms of linear spectral density, this roughly corresponds to a stability better than 30Hz/Hz between 10-2 and 1 Hz with a stability decrease close to 1/f below 10 mHz