Modern Field Programmable Gate Arrays (FPGAs) are capable of performing complex discrete signal processing algorithms with clock rates above 100MHz. This combined with FPGA’s low expense, ease of use, and selected dedicated hardware make them an ideal technology for a data acquisition system for a positron emission tomography (PET) scanner. The University of Washington is producing a high-resolution, small-animal PET scanner that utilizes FPGAs as the core of the front-end electronics. For this next generation scanner, functions that are typically performed in dedicated circuits, or offline, are being migrated to the FPGA. This will not only simplify the electronics, but the features of modern FPGAs can be utilizes to add significant signal processing power to produce higher resolution images. In this paper we report on an all-digital pulse pileup correction algorithm that is being developed for the FPGA. The pileup mitigation algorithm will allow the scanner to run at higher count rates without incurring large data losses due to the overlapping of scintillation signals. This correction technique utilizes a reference pulse to extract timing and energy information for most pileup events. Using pulses were acquired from a Zecotech Photonics MAPDN with an LFS-3 scintillator, we show that good timing and energy information can be achieved in the presence of pileup.