Can bilingual exposure impact children’s neural circuitry for learning to read? To answer this question, we investigated the brain bases of morphological awareness, one of the key spoken language abilities for learning to read in English and Chinese. Bilingual Chinese-English and monolingual English children (N = 22, ages 7–12) completed morphological tasks that best characterize each of their languages: compound morphology in Chinese (e.g. basket + ball = basketball) and derivational morphology in English (e.g. re + do = redo). In contrast to monolinguals, bilinguals showed greater activation in the left middle temporal region, suggesting that bilingual exposure to Chinese impacts the functionality of brain regions supporting semantic abilities. Similar to monolinguals, bilinguals showed greater activation in the left inferior frontal region [BA 45] in English than Chinese, suggesting that young bilinguals form language-specific neural representations. The findings offer new insights to inform bilingual and cross-linguistic models of language and literacy acquisition.