Developmental dyslexia, characterized by unexplained difficulty in reading, is associated with behavioral deficits in phonological processing. Functional neuroimaging studies have shown a deficit in the neural mechanisms underlying phonological processing in children and adults with dyslexia. The present study examined whether behavioral remediation ameliorates these dysfunctional neural mechanisms in children with dyslexia. Functional MRI was performed on 20 children with dyslexia (8-12 years old) during phonological processing before and after a remediation program focused on auditory processing and oral language training. Behaviorally, training improved oral language and reading performance. Physiologically, children with dyslexia showed increased activity in multiple brain areas. Increases occurred in left temporo-parietal cortex and left inferior frontal gyrus, bringing brain activation in these regions closer to that seen in normal-reading children. Increased activity was observed also in right-hemisphere frontal and temporal regions and in the anterior cingulate gyrus. Children with dyslexia showed a correlation between the magnitude of increased activation in left temporo-parietal cortex and improvement in oral language ability. These results suggest that a partial remediation of language-processing deficits, resulting in improved reading, ameliorates disrupted function in brain regions associated with phonological processing and produces additional compensatory activation in other brain regions.