The way humans comprehend narrative speech plays an important part in human development and experience. A group of 313 children with ages 5-18 were subjected to a large-scale functional magnetic resonance imaging (fMRI) study in order to investigate the neural correlates of auditory narrative comprehension. The results were analyzed to investigate the age-related brain activity changes involved in the narrative language comprehension circuitry. We found age-related differences in brain activity which may either reflect changes in local neuroplasticity (of the regions involved) in the developing brain or a more global transformation of brain activity related to neuroplasticity. To investigate this issue, Structural Equation Modeling (SEM) was applied to the results obtained from a group independent component analysis (Schmithorst, V.J., Holland, S.K., et al., 2005. Cognitive modules utilized for narrative comprehension in children: a functional magnetic resonance imaging study. NeuroImage) and the age-related differences were examined in terms of changes in path coefficients between brain regions. The group Independent Component Analysis (ICA) had identified five bilateral task-related components comprising the primary auditory cortex, the mid-superior temporal gyrus, the most posterior aspect of the superior temporal gyrus, the hippocampus, the angular gyrus and the medial aspect of the parietal lobule (precuneus/posterior cingulate). Furthermore, a left-lateralized network (sixth component) was also identified comprising the inferior frontal gyrus (including Broca's area), the inferior parietal lobule, and the medial temporal gyrus. The components (brain regions) for the SEM were identified based on the ICA maps and the results are discussed in light of recent neuroimaging studies corroborating the functional segregation of Broca's and Wernicke's areas and the important role played by the right hemisphere in narrative comprehension. The classical Wernicke-Geschwind (WG) model for speech processing is expanded to a two-route model involving a direct route between Broca's and Wernicke's area and an indirect route involving the parietal lobe.