Failure to develop normal language comprehension is an early warning sign of autism, but the neural mechanisms underlying this signature deficit are unknown. This is because of an almost complete absence of functional studies of the autistic brain during early development. Using functional magnetic resonance imaging, we previously observed a trend for abnormally lateralized temporal responses to language (i.e. greater activation on the right, rather than the expected left) in a small sample (n = 12) of sleeping 2-3 year olds with autism in contrast to typically developing children, a finding also reported in autistic adults and adolescents. It was unclear, however, if findings of atypical laterality would be observed in a larger sample, and at even earlier ages in autism, such as around the first birthday. Answers to these questions would provide the foundation for understanding how neurofunctional defects of autism unfold, and provide a foundation for studies using patterns of brain activation as a functional early biomarker of autism. To begin to examine these issues, a prospective, cross-sectional design was used in which brain activity was measured in a large sample of toddlers (n = 80) during the presentation of a bedtime story during natural sleep. Forty toddlers with autism spectrum disorder and 40 typically developing toddlers ranging in age between 12-48 months participated. Any toddler with autism who participated in the imaging experiment prior to final diagnosis was tracked and diagnoses confirmed at a later age. Results indicated that at-risk toddlers later diagnosed as autistic display deficient left hemisphere response to speech sounds and have abnormally right-lateralized temporal cortex response to language; this defect worsens with age, becoming most severe in autistic 3- and 4-year-olds. Typically developing children show opposite developmental trends with a tendency towards greater temporal cortex response with increasing age and maintenance of left-lateralized activation with age. We have now demonstrated lateralized abnormalities of temporal cortex processing of language in autism across two separate samples, including a large sample of young infants who later are diagnosed with autism, suggesting that this pattern may reflect a fundamental early neural developmental pathology in autism.