An implantable spacer for placement between adjacent spinous processes in a spinal motion segment is provided. The spacer includes a body defining a longitudinal passageway. A first arm and a second arm are connected to the body. Each arm has a pair of extensions and a saddle defining a U-shaped configuration for seating a spinous process therein. An actuator assembly is disposed inside the longitudinal passageway and connected to the body. When advanced, the actuator assembly contacts camming surfaces of the arms to rotate them from an undeployed configuration to a deployed configuration. In the deployed configuration, the distracted adjacent spinous processes are seated in the U-shaped portion of the arms providing sufficient distraction to open the neural foramen. An insertion instrument is provided for implanting the interspinous process spacer. The system is configured for implantation through a small percutaneous incision employing minimally invasive techniques.