Continued improvement in MRI acquisition technology has made functional MRI (fMRI) with small isotropic voxel sizes down to 1 mm and below more commonly available. Although many conventional fMRI studies seek to investigate regional patterns of cortical activation for which conventional voxel sizes of 3 mm and larger provide sufficient spatial resolution, smaller voxels can help avoid contamination from adjacent white matter (WM) and cerebrospinal fluid (CSF), and thereby increase the specificity of fMRI to signal changes within the gray matter. Unfortunately, temporal signal-to-noise ratio (tSNR), a metric of fMRI sensitivity, is reduced in high-resolution acquisitions, which offsets the benefits of small voxels. Here we introduce a framework that combines small, isotropic fMRI voxels acquired at 7 T field strength with a novel anatomically-informed, surface mesh-navigated spatial smoothing that can provide both higher detection power and higher resolution than conventional voxel sizes. Our smoothing approach uses a family of intracortical surface meshes and allows for kernels of various shapes and sizes, including curved 3D kernels that adapt to and track the cortical folding pattern. Our goal is to restrict smoothing to the cortical gray matter ribbon and avoid noise contamination from CSF and signal dilution from WM via partial volume effects. We found that the intracortical kernel that maximizes tSNR does not maximize percent signal change (ΔS/S), and therefore the kernel configuration that optimizes detection power cannot be determined from tSNR considerations alone. However, several kernel configurations provided a favorable balance between boosting tSNR and ΔS/S, and allowed a 1.1-mm isotropic fMRI acquisition to have higher performance after smoothing (in terms of both detection power and spatial resolution) compared to an unsmoothed 3.0-mm isotropic fMRI acquisition. Overall, the results of this study support the strategy of acquiring voxels smaller than the cortical thickness, even for studies not requiring high spatial resolution, and smoothing them down within the cortical ribbon with a kernel of an appropriate shape to achieve the best performance—thus decoupling the choice of fMRI voxel size from the spatial resolution requirements of the particular study. The improvement of this new intracortical smoothing approach over conventional surface-based smoothing is expected to be modest for conventional resolutions, however the improvement is expected to increase with higher resolutions. This framework can also be applied to anatomically-informed intracortical smoothing of higher-resolution data (e.g. along columns and layers) in studies with prior information about the spatial structure of activation.