Scientists at the Universities of Newcastle and Northumbria tested 44 people, who were either given the herb or a dummy placebo pill. They found that those given the sage oil tablets performed much better in a "word recall test". Experts believe the active ingredient may boost levels of a chemical that helps transmit messages in the brain.
The Medicinal Plant Research Centre (MPRC) at the universities are testing many old-fashioned claims about the healing powers of herbs and flowers.
Sage is often referred to in ancient texts - in 1597 the herbalist John Gerard said that it was "singularly good for the head and quickeneth the nerves and memory." Researcher Nicola Tildsley said the results of the study proved that, in some cases at least, the herbalists should be taken seriously.
She said: "This proves how valuable the work by the old herbalists was, and that they shouldn't just be ignored because they were writing centuries ago."
There are still question marks over the herb's ability to boost long-term memory, she said.
"Tests would need to be carried out on people over a longer period of time to prove that sage improves exam performance - but we don't have any plans to do this at present."