Currently the major issues in applying the laser as an illumination source for projectors are beam shaping and laser speckle. We present a compact total solution for both issues by using a diffractive beam shaper associated with a cylindrical lens for the illumination optics and a vibrating motor attached to the beam shaper to eliminate speckle on the projection screen. The diffractive beam shaper features a double-sided microlens array with a lateral shift to each other. The illumination pattern is free of zero diffraction order mainly due to the continuous and spherical surface relief of the lenslet, which can be accurately fabricated with diamond turning and injection molding without quantizing surface relief, so that the illumination pattern on the microdisplay can match the design very well with high diffraction efficiency. In addition, the vibration of the diffractive beam shaper in the longitudinal mode has been found effective for eliminating the dot pattern in the illumination and reducing laser speckle on the projection screen. The proposed laser illuminator has been implemented on a three-panel LCoS projector engine to replace the traditional UHP lamp. The uniformity and speckle contrast are measured to be 78% and 5.5% respectively, which demonstrates the feasibility and potential of the proposed scheme.