Although many studies have examined the location and function of the mirror neuron system (MNS) in human adults, we know relatively little about its development. The current study fills this gap by using fMRI to examine for the first time the development of the brain regions implicated in action execution, action observation, and their overlap. We examined age-related differences in brain activation by contrasting a group of children (n = 21) and adults (n = 18). Surfaced-based analyses of action execution and action observation revealed that brain activity for action observation and execution in children is similar to adults, though adults displayed greater activity than children within the right superior parietal lobe during action execution and the occipital lobe during action observation compared to control. Further, within-individual measures of overlapping activation between action observation and execution revealed age-related differences, such that adults, compared to children, displayed more spatial overlap. Moreover, the extent of the overlap in activation across conditions was related to better motor skills and action representation abilities in children. These data indicate that the MNS changes between middle childhood and adulthood. The data also demonstrate the functional significance of the putative MNS to motor skills and action representation during development.