The effects of configural changes on faces were investigated in children to determine their role in encoding and recognition processes. Upright, inverted, and contrast-reversed unfamiliar faces were presented in blocks in which one-third of the pictures repeated immediately or after one intervening face. Subjects (8–16 years) responded to repeated faces; eventrelated potentials were recorded throughout the procedure. Recognition improved steadily with age and all components studied showed age effects reflecting differing maturation processes occurring until adulthood. All children were affected by inversion and contrast-reversal, and face-type effects were seen on latencies and amplitudes of early components (P1 and N170), as well as on later frontal amplitudes. The “old-new” repetition effects (larger amplitude for repeated stimuli) were found at frontal sites and were similar across age groups and face types, suggesting a general working memory system comparably involved in all age groups. These data demonstrate that (1) there is quantitative development in face processing, (2) both face encoding and recognition improve with age, but (3) only encoding is affected by configural changes. The data also suggest a gradual tuning of face processing towards the upright orientation.