For highly sensitive and accurate acetylene (C2H2) detection, a near-infrared (NIR) off-axis integrated-cavity output spectroscopy (OA-ICOS) sensor system based on an ultra-compact cage-based absorption cell was proposed. The absorption cell with dimensions of 10 cm × 8 cm × 6 cm realized a dense-pattern and an easily-aligned stable optical system. The OA-ICOS sensor system employed a 6cm-long optical cavity that was formed by two mirrors with a reflectivity of 99.35% and provided an effective absorption path length of ∼9.28 m. The performance of the C2H2 sensor system based on two measurement schemes, i.e. laser direct absorption spectroscopy (LDAS) and wavelength modulation spectroscopy (WMS) is reported. A NIR distributed feedback (DFB) laser was employed for targeting a C2H2 absorption line at 6523.88 cm−1. An Allan deviation analysis yielded a detection sensitivity of 760 parts-per-billion in volume (ppbv) for an averaging time of 304 s using the LDAS-based OA-ICOS. A detection sensitivity of 85 ppbv for an averaging time of 250 s was obtained using the WMS-based OA-ICOS, which was further improved by a factor of ~9 compared to the result obtained with the LDAS method. The proposed sensor system has the advantages of reduced size and cost with acceptable detection sensitivity, which is suitable for applications in trace gas sensing in harsh environments and weight-limited balloon-embedded observations.