The HiRES sounding rocket payload has been described in detail in previous SPIE Proceedings. Here, optical design of the toroidal grating spectrograph is presented and discussed. Ray tracing results are presented which outline the extreme ultraviolet (EUV) performance theoretically attainable with the HiRES instrument. Effects of optical system misalignment on the spectrograph image quality are investigated. Laboratory test results of two f/15 toroidal diffraction gratings using a 1 meter vacuum spectrograph and a multi-anode microchannel array detector are presented and discussed. The test toroidal gratings are fabricated using the elastic substrate replication technique from a ruled master grating with either a 3600 lines/mm or 1800 lines/mm density. EUV images of 10 25 micrometers pinholes with 250 micrometers center-to-center spacing taken with a hollow cathode discharge lamp are presented. Interferometric studies of toroidal figure accuracy as well as optical and electron microscopy investigations into surface quality are presented and discussed. It is found that the current toroidal gratings exhibit good imaging characteristics across a wide wavelength range but suffer from excessive EUV scatter and spectral ghosting.