This paper presents a spatial fading emulator for evaluating handset MIMO antennas in a cluster environment. The proposed emulator is based on Clarke's model and has the ability to control RF signals directly in spatial domain to generate an accurate radio propagation channel model, which includes both uniform and non-uniform angular power spectra (APS) in the horizontal plane. Characteristics of a propagation channel such as fading correlations, eigenvalues and MIMO channel capacities of handset antennas located in the vicinity of the emulator's ring can be evaluated. The measured results show that the fading emulator with 31 antenna probes is sufficient to evaluate fading correlation and MIMO channel capacity of handset antenna in the case of a narrow APS with the standard deviation of more than 20 degrees.