A spool assembly configured for use in a two-stage proportional control valve in a fluid system includes a substantially cylindrical sleeve having an axially extending sleeve bore extending from an open first end to an open second end. A spool includes a spool bore that extends from an open first axial end to a closed second axial end and is slidably mounted within the sleeve bore. The spool further includes a first circumferentially extending groove defining a fluid flow path, a second circumferentially extending groove formed near a first end thereof, a third circumferentially extending groove formed near the second axial end thereof, a circumferentially extending pressure groove formed therein between the second axial end and the third circumferentially extending groove, and first, second, and third transverse fluid passageways formed through a side wall of the spool.