Neuroimaging and lesion studies suggest that occipito-temporal brain areas play a necessary role in recognizing a wide variety of objects, be they faces, letters, numbers, or household items. However, many questions remain regarding the details of exactly what kinds of information are processed by the occipito-temporal cortex. Here, we address this question with respect to reading. Ten healthy adult subjects performed a single word reading task. We used whole-head magnetoencephalography to measure the spatio-temporal dynamics of brain responses, and investigated their sensitivity to: (1) lexicality (defined here as the difference between words and consonant strings), (2) word length, and (3) variation in letter position. Analysis revealed that midline occipital activity around 100 msec, consistent with low-level visual feature analysis, was insensitive to lexicality and variation in letter position, but was slightly affected by string length. Bilateral occipito-temporal activations around 150 msec were insensitive to lexicality and reacted to word length only in the timing (and not strength) of activation. However, vertical shifts in letter position revealed a hemispheric imbalance: The right hemisphere activation increased with the shifts, whereas the opposite pattern was evident in the left hemisphere. The results are discussed in the light of Caramazza and Hillis's (1990) model of early reading.