The Pupil-mapping Exoplanet Coronagraphic Observer (PECO) mission concept uses a coronagraphic 1.4-m space-based telescope to both image and characterize extra-solar planetary systems at optical wavelengths. PECO delivers 10 -10 contrast at 2 λ/D separation (0.15") using a high-performance Phase-Induced Amplitude Apodization (PIAA) coronagraph which remaps the telescope pupil and uses nearly all of the light coming into the aperture. For exoplanet characterization, PECO acquires narrow field images simultaneously in 16 spectral bands over wavelengths from 0.4 to 0.9 μm, utilizing all available photons for maximum wavefront sensing and sensitivity for imaging and spectroscopy. The optical design is optimized for simultaneous low-resolution spectral characterization of both planets and dust disks using a moderate-sized telescope. PECO will image the habitable zones of about 20 known F, G, K stars at a spectral resolution of R≈15 with sensitivity sufficient to detect and characterize Earth-like planets and to map dust disks to within a fraction of our own zodiacal dust cloud brightness. The PIAA coronagraph adopted for PECO reduces the required telescope diameter by a factor of two compared with other coronagraph approaches that were considered for Terrestrial Planet Finder Coronagraph Flight Baseline 1, and would therefore also be highly valuable for larger telescope diameters. We report on ongoing laboratory activities to develop and mature key PECO technologies, as well as detailed analysis aimed at verifying PECO's wavefront and pointing stability requirement can be met without requiring development of new technologies.