Adolescence is a complex period of concurrent mental and physical development that facilitates adult functioning at multiple levels. Despite the growing number of neuroimaging studies of cognitive development in adolescence focusing on regional activation patterns, there remains a paucity of information about the functional interactions across these participating regions that are critical for cognitive functioning, including memory. The current study used structural equation modeling (SEM) to determine how interactions among brain regions critical for memory change over the course of adolescence. We obtained functional MRI in 77 individuals aged 8-16 years old, divided into younger (ages 8-10) and older (ages > 11) cohorts, using an incidental encoding memory task to activate hippocampus formation and associated brain networks, as well as behavioral data on memory function. SEM was performed on the imaging data for four groups (younger girls, younger boys, older girls, and older boys) that were subsequently compared using a stacked model approach. Significant differences were seen between the models for these groups. Younger boys had a predominantly posterior distribution of connections originating in primary visual regions and terminating on multi-modal processing regions. In older boys, there was a relatively greater anterior connection distribution, with increased effective connectivity within association and multi-modal processing regions. Connection patterns in younger girls were similar to those of older boys, with a generally anterior-posterior distributed network among sensory, multi-modal, and limbic regions. In contrast, connections in older girls were widely distributed but relatively weaker. Memory performance increased with age, without a significant difference between the sexes. These findings suggest a progressive reorganization among brain regions, with a commensurate increase in efficiency of cognitive functioning, from younger to older individuals in both girls and boys, providing insight into the age- and gender-specific processes at play during this critical transition period.