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The neural underpinnings of humans’ ability to process faces and how it changes over typical development have been extensively studied using paradigms where face stimuli are oversimplified, isolated, and decontextualized. The prevalence of this approach, however, has resulted in limited knowledge of face processing in ecologically valid situations, in which faces are accompanied by contextual information at multiple time scales. In the present study, we use a naturalistic movie paradigm to investigate how neuromagnetic activation and phase synchronization elicited by faces from movie scenes in humans differ between children and adults. We used MEG data from 22 adults (6 females, 3 left handed; mean age, 27.7 ± 5.28 years) and 20 children (7 females, 1 left handed; mean age, 9.5 ± 1.52 years) collected during movie viewing. We investigated neuromagnetic time-locked activation and phase synchronization elicited by movie scenes containing faces in contrast to other movie scenes. Statistical differences between groups were tested using a multivariate data-driven approach. Our results revealed lower face-elicited activation and theta/alpha phase synchrony between 120 and 330 ms in children compared with adults. Reduced connectivity in children was observed between the primary visual areas as well as their connections with higher-order frontal and parietal cortical areas. This is the first study to map neuromagnetic developmental changes in face processing in a time-locked manner using a naturalistic movie paradigm. It supports and extends the existing evidence of core face-processing network maturation accompanied by the development of an extended system of higher-order cortical areas engaged in face processing.