Relational reasoning is an essential component of fluid intelligence, and is known to have a protracted developmental trajectory. To date, little is known about the neural changes that underlie improvements in reasoning ability over development. In this event-related functional magnetic resonance imaging (fMRI) study, children aged 8-12 and adults aged 18-25 performed a relational reasoning task adapted from Raven's Progressive Matrices. The task included three levels of relational reasoning demands: REL-0, REL-1, and REL-2. Children exhibited disproportionately lower accuracy than adults on trials that required integration of two relations (REL-2). Like adults, children engaged lateral prefrontal cortex (PFC) and parietal cortex during task performance; however, they exhibited different time courses and activation profiles, providing insight into their approach to the problems. As in prior studies, adults exhibited increased rostrolateral PFC (RLPFC) activation when relational integration was required (REL-2 > REL-1, REL-0). Children also engaged RLPFC most strongly for REL-2 problems at early stages of processing, but this differential activation relative to REL-1 trials was not sustained throughout the trial. These results suggest that the children recruited RLPFC while processing relations, but failed to use it to integrate across two relations. Relational integration is critical for solving a variety of problems, and for appreciating analogies; the current findings suggest that developmental improvements in this function rely on changes in the profile of engagement of RLPFC, as well as dorsolateral PFC and parietal cortex.