Phonological awareness is essential for reading, and is common to all language systems, including alphabetic languages and Japanese. This cognitive factor develops during childhood, and is thought to be associated with shifts in brain activity. However, the nature of this neurobiological developmental shift is unclear for speakers of Japanese, which is not an alphabetical language. The present study aimed to reveal a shift in brain functions for processing phonological information in native-born Japanese children. We conducted a phonological awareness task and examined hemodynamic activity in 103 children aged 7-12 years. While younger children made mistakes and needed more time to sort phonological information in reverse order, older children completed the task quickly and accurately. Additionally, younger children exhibited increased activity in the bilateral dorsolateral prefrontal cortex (DLPFC), which may be evidence of immature phonological processing skills. Older children exhibited dominant activity in the left compared with the right DLPFC, suggesting that they had already acquired phonological processing skills. We also found significant effects of age and lateralized activity on behavioral performance. During earlier stages of development, the degree of left lateralization appears to have a smaller effect on behavioral performance. Conversely, in later stages of development, the degree of left lateralization appears to have a stronger influence on behavioral performance. These initial findings regarding a neurobiological developmental shift in Japanese speakers suggest that common brain regions play a critical role in the development of phonological processing skills among different languages systems, such as Japanese and alphabetical languages.