The neural organization of cognitive processes, particularly hemispheric lateralization, changes throughout childhood and adolescence. Differences in the neural basis of relational memory between children and adults are not well characterized. In this study we used magnetoencephalography to observe the lateralization differences of hippocampal activation in children and adults during performance of a relational memory task, transverse patterning (TP). The TP task was paired with an elemental control task, which does not depend upon the hippocampus. We contrasted two hypotheses; the compensation hypothesis would suggest that more bilateral activation in children would lead to better TP performance, whereas the maturation hypothesis would predict that a more adult-like right-lateralized pattern of hippocampal activation would lead to better performance. Mean-centered partial least squares analysis was used to determine unique patterns of brain activation specific to each task per group, while diminishing activation that is consistent across tasks. Our findings support the maturation hypothesis that a more adult-like pattern of increased right hippocampal lateralization in children leads to superior performance on the TP task. We also found dynamic changes of lateralization throughout the time course for all three groups, suggesting that caution is needed when interpreting conclusions about brain lateralization. (JINS, 2013, 19, 1–11)