Multiple-input multiple-output has been a key technology for wireless systems for decades. For typical MIMO communication systems, antenna array elements are usually separated by half of the carrier wavelength, thus termed as conventional MIMO. In this paper, we investigate the performance of multi-user MIMO communication, with sparse arrays at both the transmitter and receiver side, i.e., the array elements are separated by more than half wavelength. Given the same number of array elements, the performance of sparse MIMO is compared with conventional MIMO. On one hand, sparse MIMO has a larger aperture, which can achieve narrower main lobe beams that make it easier to resolve densely located users. Besides, increased array aperture also enlarges the near-field communication region, which can enhance the spatial multiplexing gain, thanks to the spherical wavefront property in the near-field region. On the other hand, element spacing larger than half wavelength leads to undesired grating lobes, which, if left unattended, may cause severe inter-user interference. To gain further insights, we first study the spatial multiplexing gain of the basic single-user sparse MIMO communication system, where a closed-form expression of the near-field effective degree of freedom is derived. The result shows that the EDoF increases with the array sparsity for sparse MIMO before reaching its upper bound, which equals to the minimum value between the transmit and receive antenna numbers. Furthermore, the scaling law for the achievable data rate with varying array sparsity is analyzed and an array sparsity-selection strategy is proposed. We then consider the more general multi-user sparse MIMO communication system. It is shown that sparse MIMO is less likely to experience severe IUI than conventional MIMO.