Magnetic susceptibility differences at tissue interfaces lead to signal loss in conventional gradient‐echo (GE) EPI. This poses a problem for fMRI in language and memory paradigms, which activate the most affected regions. Two methods proposed to overcome this are spin‐echo EPI and dual GE EPI, where two EPI read‐outs are serially collected at a short and longer echo time. The spin‐echo method applies a refocusing pulse to recover dephased MR signal due to static field inhomogeneities, but is known to have a relatively low blood oxygenation level dependant (BOLD) sensitivity. In comparison, GE has superior BOLD sensitivity, and by employing an additional shorter echo, in a dual GE sequence, it can reduce signal loss due to spin dephasing. We directly compared dual GE and spin‐echo fMRI during a semantic categorization task, which has been shown to activate the inferior temporal region—a region known to be affected by magnetic susceptibility. A whole brain analysis showed that the dual GE resulted in significantly higher activation within the left inferior temporal fusiform (ITF) cortex, compared to spin‐echo. The inferior frontal gyrus (IFG) was activated for dual GE, but not spin‐echo. Regions of interest analysis was carried out on the anterior and posterior ITF, left and right IFG, and part of the cerebellum. Dual GE outperformed spin‐echo in the anterior and posterior ITF and bilateral IFG regions, whilst being equal in the cerebellum. Hence, dual GE should be the method of choice for fMRI studies of inferior temporal regions. Hum Brain Mapp 35:4118–4128, 2014. © 2014 Wiley Periodicals, Inc.