A consistent finding in functional brain imaging studies of reading with dyslexia is reduced inferior occipito-temporal activation linked to deviant processing of visual word forms. Time-sensitive event-related potentials (ERP) further revealed reduced inferior occipito-temporal N1 tuning for print in dyslexic 2nd graders suggesting the reduction affects fast processing and the initial development of dyslexia. Here, we followed up the same groups with ERP recordings and investigated how fast print tuning deficits in dyslexia develop from 2nd to 5th grade. Using functional magnetic resonance imaging (fMRI), we further characterized spatial aspects of print tuning in the 5th grade. The robust N1 tuning deficit for print in the dyslexic 2nd graders had largely disappeared by grade 5 consistent with a developmental delay. Reduced word-specific activation in dyslexic 5th grader's fMRI data occurred bilaterally in middle temporal regions and in the left posterior superior sulcus. Although no group differences in inferior occipito-temporal regions appeared in the whole brain analysis, a region of interest analysis of the Visual Word Form Area revealed that control children showed a more lateralized word-specific activation pattern than the children with dyslexia. The results suggest that while impaired N1 tuning for print plays a major role for dyslexia at the beginning of learning to read, other aspects of visual word form processing in the same region remain impaired in dyslexic children after several years of reading practice. Overall, neural deficits associated with dyslexia appear to be plastic and to change throughout development and reading acquisition.