Developmental dyslexia has been associated with a dysfunction of a brain region in the left inferior occipitotemporal cortex, called the "visual word-form area" (VWFA). In adult normal readers, the VWFA is specialized for print processing and sensitive to the orthographic familiarity of letter strings. However, it is still unclear whether these two levels of occipitotemporal specialization are affected in developmental dyslexia. Specifically, we investigated whether (a) these two levels of specialization are impaired in dyslexic children with only a few years of reading experience and (b) whether this impairment is confined to the left inferior occipitotemporal VWFA, or extends to adjacent regions of the "VWF-system" with its posterior-anterior gradient of print specialization. Using fMRI, we measured brain activity in 18 dyslexic and 24 age-matched control children (age 9.7-12.5 years) while they indicated if visual stimuli (real words, pseudohomophones, pseudowords and false-fonts) sounded like a real word. Five adjacent regions of interest (ROIs) in the bilateral occipitotemporal cortex covered the full anterior-posterior extent of the VWF-system. We found that control and dyslexic children activated the same main areas within the reading network. However, a gradient of print specificity (higher anterior activity to letter strings but higher posterior activity to false-fonts) as well as a constant sensitivity to orthographic familiarity (higher activity for unfamiliar than familiar word-forms) along the VWF-system could only be detected in controls. In conclusion, analyzing responses and specialization profiles along the left VWF-system reveals that children with dyslexia show impaired specialization for both print and orthography.