We report the design and development of an efficient speckle reduction device for projection imaging. The device is composed of a combination of a rod-shaped waveguide diffuser and a reflective pyramidal cavity. The simulation results reveal that the pyramidal cavity with waveguide diffuser is a highly efficient light guide comparable to the other conventional light guides. Further, the device was developed and tested experimentally on the basis of speckle contrast and image quality for both the microscopic and macroscopic objects. An acrylic rod-shaped waveguide diffuser was developed and mounted at the middle of a pyramidal shaped cavity which was fabricated using 3D printer. Four highly reflecting mirrors were installed to make the cavity reflective. The system is highly effective for the speckle suppression due to the coherence reduction via multiple scattering from the rod-shaped waveguide diffuser and multiple reflections from the pyramidal cavity. In the system, a combined effect of spatial and angular diversity along with intensity averaging leads to an effective speckle free uniform illumination. Reduced speckle contrast using the proposed system was observed up to 2%, which is nearly equivalent to mechanically moving diffuser system. The device is able to reduce speckle contrast significantly without using any moving parts and in addition, it does not consume any electrical energy. The proposed system is compact, low cost, efficient, and very effective for low to high power laser sources in speckle reduction. Experimental results are compared with stationary and rotating diffuser system on the basis of computed speckle contrast and image quality.