The purpose of this study was to optimize and validate a multi-contrast, multi-echo fMRI method using a combined spin- and gradient-echo (SAGE) acquisition. It was hypothesized that SAGE-based blood oxygen level-dependent (BOLD) functional MRI (fMRI) will improve sensitivity and spatial specificity while reducing signal dropout. SAGE-fMRI data were acquired with five echoes (2 gradient-echoes, 2 asymmetric spin-echoes, and 1 spin-echo) across 12 protocols with varying acceleration factors, and temporal SNR (tSNR) was assessed. The optimized protocol was then implemented in working memory and vision tasks in 15 healthy subjects. Task-based analysis was performed using individual echoes, quantitative dynamic relaxation times T2 * and T2, and echo time-dependent weighted combinations of dynamic signals. These methods were compared to determine the optimal analysis method for SAGE-fMRI. Implementation of a multiband factor of 2 and sensitivity encoding (SENSE) factor of 2.5 yielded adequate spatiotemporal resolution while minimizing artifacts and loss in tSNR. Higher BOLD contrast-to-noise ratio (CNR) and tSNR were observed for SAGE-fMRI relative to single-echo fMRI, especially in regions with large susceptibility effects and for T2-dominant analyses. Using a working memory task, the extent of activation was highest with T2 *-weighting, while smaller clusters were observed with quantitative T2 * and T2. SAGE-fMRI couples the high BOLD sensitivity from multi-gradient-echo acquisitions with improved spatial localization from spin-echo acquisitions, providing two contrasts for analysis. SAGE-fMRI provides substantial advantages, including improving CNR and tSNR for more accurate analysis.