A hybrid spool valve includes a body having a longitudinal bore. The bore has a fluid inlet chamber in fluid communication with a fluid inlet port and a fluid outlet chamber in fluid communication with a fluid outlet port. A spool is slidably mounted in the bore and is movable between a fully open position, a fully closed position, and a plurality of partially open positions. A pilot microvalve is mounted within the bore and is configured to control the sliding movement of the spool by varying the flow of fluid therethrough. A seal is disposed in a groove formed in an outside surface of the spool such that when the spool is in the fully closed position the seal engages a wall of the bore, and when the spool is the fully open position or one of the partially open positions the seal does not engage the bore.