Atrophy in the spinal cord (SC), gray (GM) and white matter (WM) is typically measured in-vivo by image segmentation on multi-echo gradient-echo magnetic resonance images. The aim of this study was to establish an acquisition and analysis protocol for optimal SC and GM segmentation in the lumbosacral cord at 3 T. Ten healthy volunteers underwent imaging of the lumbosacral cord using a 3D spoiled multi-echo gradient-echo sequence (Siemens FLASH, with 5 echoes and 8 repetitions) on a Siemens Prisma 3 T scanner. Optimal numbers of successive echoes and signal averages were investigated comparing signal-to-noise (SNR) and contrast-to-noise ratio (CNR) values as well as qualitative ratings for segmentability by experts. The combination of 5 successive echoes yielded the highest CNR between WM and cerebrospinal fluid and the highest rating for SC segmentability. The combination of 3 and 4 successive echoes yielded the highest CNR between GM and WM and the highest rating for GM segmentability in the lumbosacral enlargement and conus medullaris, respectively. For segmenting the SC and GM in the same image, we suggest combining 3 successive echoes. For SC or GM segmentation only, we recommend combining 5 or 3 successive echoes, respectively. Six signal averages yielded good contrast for reliable SC and GM segmentation in all subjects. Clinical applications could benefit from these recommendations as they allow for accurate SC and GM segmentation in the lumbosacral cord.