Parallel imaging methods become increasingly available on clinical MR scanners. To investigate the potential of sensitivity-encoded single-shot EPI (SENSE-EPI) for functional MRI, five imaging protocols at different SENSE reduction factors (R) and matrix sizes were compared with respect to their noise characteristics and their sensitivity toward functional activation in a motor task examination. At constant echo times, SENSE-EPI was either used to shorten the single volume acquisition times (TR(min)) at matrix size 128 x 100 (22 slices) from 3.9 s (no SENSE) to 2.0 s at R = 3, or to increase the matrix size to 192 x 153 (22 slices), resulting in TR(min) = 5.3 s for R = 2 or TR(min) = 3.4 s for R = 3. At the lower resolution, the bisection of echo train length (R = 2) substantially reduced distortions and blurring, while signal-to-noise and statistical power (measured by cluster size and maximum t value per unit time) were hardly reduced. At R = 3 the additional gain in speed and distortion reduction was quite small, while signal-to-noise and statistical power dropped significantly. With enhanced spatial resolution the time course signal-to-noise was better than expected from theory for purely thermal noise because of a reduced contribution of physiological noise, and statistical power almost reached that of the regular, low-resolution single-shot EPI, with a slight drop off toward R = 3. Thus, SENSE-EPI allows to substantially increase speed and spatial resolution in fMRI. At SENSE reduction factors up to R = 2, the potential drawbacks regarding signal-to-noise and statistical power are almost negligible.