Characterization of brain-behavior relationships through functional magnetic imaging (fMRI) within typically or atypically developing populations poses methodological and interpretational challenges. We consider theoretical, methodological, and artifactual factors that influence characterization of developmental and adaptive changes in childhood. Findings from anatomical and physiological brain development studies are highlighted as they may influence functional imaging results. Then, we consider several patterns of functional activation within the context of developmental processes as well as neurologic disease. Hypotheses regarding the development of cognitive networks are proposed to account for the individual differences seen in normal and atypical development. We also identify potential sources of unwanted variability related to experimental design and task performance and suggest possible solutions to help minimize these effects. Lastly, a challenge for current studies is a lack of group and individual analysis methods that can be reliably applied to capture and quantify factors that contribute to variability introduced by developmental and disease processes. We review current methods and propose potential solutions.