Developmental dyslexia is a severe reading disorder, which is characterized by dysfluent reading and impaired automaticity of visual word processing. Adults with dyslexia show functional deficits in several brain regions including the so-called “Visual Word Form Area” (VWFA), which is implicated in visual word processing and located within the larger left occipitotemporal VWF-System. The present study examines functional connections of the left occipitotemporal VWF-System with other major language areas in children with dyslexia. Functional connectivity MRI was used to assess connectivity of the VWF-System in 18 children with dyslexia and 24 age-matched controls (age 9.7–12.5 years) using five neighboring left occipitotemporal regions of interest (ROIs) during a continuous reading task requiring phonological and orthographic processing. First, the results revealed a focal origin of connectivity from the VWF-System, in that mainly the VWFA was functionally connected with typical left frontal and parietal language areas in control children. Adjacent posterior and anterior VWF-System ROIs did not show such connectivity, confirming the special role that the VWFA plays in word processing. Second, we detected a significant disruption of functional connectivity between the VWFA and left inferior frontal and left inferior parietal language areas in the children with dyslexia. The current findings add to our understanding of dyslexia by showing that functional disconnection of the left occipitotemporal system is limited to the small VWFA region crucial for automatic visual word processing, and emerges early during reading acquisition in children with dyslexia, along with deficits in orthographic and phonological processing of visual word forms.