Learning to read alphabetic languages starts with learning letter–speech-sound associations. How this process changes brain function during development is still largely unknown. We followed 102 children with varying reading skills in a mixed-longitudinal/cross-sectional design from the prereading stage to the end of elementary school over five time points (n = 46 with two and more time points, of which n = 16 fully-longitudinal) to investigate the neural trajectories of letter and speech sound processing using fMRI. Children were presented with letters and speech sounds visually, auditorily, and audiovisually in kindergarten (6.7yo), at the middle (7.3yo) and end of first grade (7.6yo), and in second (8.4yo) and fifth grades (11.5yo). Activation of the ventral occipitotemporal cortex for visual and audiovisual processing followed a complex trajectory, with two peaks in first and fifth grades. The superior temporal gyrus (STG) showed an inverted U-shaped trajectory for audiovisual letter processing, a development that in poor readers was attenuated in middle STG and absent in posterior STG. Finally, the trajectories for letter-speech-sound integration were modulated by reading skills and showed differing directionality in the congruency effect depending on the time point. This unprecedented study captures the development of letter processing across elementary school and its neural trajectories in children with varying reading skills.