Many fMRI analysis methods use a model for the hemodynamic response function (HRF). Common models of the HRF, such as the Gaussian or Gamma functions, have parameters that are usually selected a priori by the data analyst. A new method is presented that characterizes the HRF over a wide range of parameters via three basis signals derived using principal component analysis (PCA). Covering the HRF variability, these three basis signals together with the stimulation pattern define signal subspaces which are applicable to both linear and nonlinear modeling and identification of the HRF and for various activation detection strategies. Analysis of simulated fMRI data using the proposed signal subspace showed increased detection sensitivity compared to the case of using a previously proposed trigonometric subspace. The methodology was also applied to activation detection in both event-related and block design experimental fMRI data using both linear and nonlinear modeling of the HRF. The activated regions were consistent with previous studies, indicating the ability of the proposed approach in detecting brain activation without a priori assumptions about the shape parameters of the HRF. The utility of the proposed basis functions in identifying the HRF is demonstrated by estimating the HRF in different activated regions.