We describe photometric and spectroscopic observations of the major outburst that AG Dra underwent between 2006 and 2008. The outburst peaked at U=8.4, B=9.0, V=8.7 around 2006 September 6, making it the brightest U-band event since the 1994 outburst. It was of the cold type, according to the classification of AG Dra outbursts introduced by Gonzalez-Riestra et al. (2006JAVSO..35..172G ). A second, fainter maximum (this time of the hot type) followed 400 days after the primary one, peaking at U=9.1, B=9.7, V=9.0 on 2007 October 7. The outburst phase ended about 600 days after the primary maximum. High resolution spectra obtained during early decline from primary maximum showed emission lines of Mg II, Si II, Ti II, and Fe II in addition to the usual lines of H, He I, and He II.