Understanding how genes impact the brain's functional activation for learning and cognition during development remains limited. We asked whether a common genetic variant in the BDNF gene (the Val66Met polymorphism) modulates neural activation in the young brain during a critical period for the emergence and maturation of the neural circuitry for reading. In animal models, the bdnf variation has been shown to be associated with the structure and function of the developing brain and in humans it has been associated with multiple aspects of cognition, particularly memory, which are relevant for the development of skilled reading. Yet, little is known about the impact of the Val66Met polymorphism on functional brain activation in development, either in animal models or in humans. Here, we examined whether the BDNF Val66Met polymorphism (dbSNP rs6265) is associated with children's (age 6-10) neural activation patterns during a reading task (n = 81) using functional magnetic resonance imaging (fMRI), genotyping, and standardized behavioral assessments of cognitive and reading development. Children homozygous for the Val allele at the SNP rs6265 of the BDNF gene outperformed Met allele carriers on reading comprehension and phonological memory, tasks that have a strong memory component. Consistent with these behavioral findings, Met allele carriers showed greater activation in reading-related brain regions including the fusiform gyrus, the left inferior frontal gyrus and left superior temporal gyrus as well as greater activation in the hippocampus during a word and pseudoword reading task. Increased engagement of memory and spoken language regions for Met allele carriers relative to Val/Val homozygotes during reading suggests that Met carriers have to exert greater effort required to retrieve phonological codes.