Reading functions beyond early visual precessing are known to be lateralized to the left hemisphere, but how left-lateralization arises during literacy acquisition is an open question. Bilateral processing or rightward asymmetries have previously been associated with developmental dyslexia. However, it is unclear at present to what extent this lack of left-lateralization reflects differences in reading ability. In this study, a group of illiterate adults in rural India (N=29) participated in a literacy training program over the course of six months. fMRI measures were obtained before and after training on a number of different visual stimulus categories, including written sentences, false fonts, and object categories such as houses and faces. This training group was matched on demographic and socioeconomic variables to an illiterate no-training group and to low- and highly-literate control groups, who were also scanned twice but received no training (total N=90). In a cross-sectional analysis before training, reading ability was positively correlated with increased BOLD responses in a left-lateralized network including the dorsal and ventral visual streams for text and false fonts, but not for other types of visual stimuli. A longitudinal analysis of learning effects in the training group showed that beginning readers engage bilateral networks more than proficient readers. Lateralization of BOLD responses was further examined by calculating laterality indices in specific regions. We observed training-related changes in lateralization for processing written stimuli in a number of subregions in the dorsal and ventral visual streams, as well as in the cerebellum. Together with the cross-sectional results, these data suggest a causal relationship between reading ability and the degree of hemispheric asymmetry in processing written materials.