This study examined the development of neural processing of auditorally presented words in high functioning children with autism. The purpose was to test the hypothesis that electrophysiological abnormalities associated with impairments in early cortical processing and in semantic processing persist into early adolescence in autistic individuals. Eighteen children with autism and 18 normally developing children participated in the study. Ten of the children in each group were 8-9 years old, and 8 in each group were 11-12 years old (n = 36). Lists of words were presented auditorally; half were words belonging to a specified semantic category and half were words outside the category. Results revealed that while early cortical processing abnormalities appeared to resolve with development, children with autism in both age groups failed to exhibit differential semantic processing of in-versus out-of-category words. Further, while 8 year-olds with autism generated a large N4 (a late cognitive ERP component, which is sensitive to semantic deviance from a context) to words in both stimulus classes the 11 year-olds showed attenuated N4 relative to normal controls in response to both stimulus types. An attempt is made to integrate findings with current cognitive theories toward a parsimonious explanation of semantic classification deficits in autism.