Do you want to decrease the height, the width, or both? Would it be okay to shrink the text font or would you prefer to cut off the words after a certain number of characters?

Have you considered moving less frequently used bookmarks into a folder on the bar?

The appearance of the Bookmarks toolbar is governed by style rules. These rules are built in to Firefox but can be overridden by your own rules, either in a userChrome.css file, or userstyles you create in the Stylish extension, or by add-ons designed to let you easily change the Firefox UI.

See also:

• Roomy Bookmarks Toolbar: https://addons.mozilla.org/firefox/addon/roomy-bookmarks-toolbar/