The ontogeny of large-scale functional organization of the human brain is not well understood. Here we use network analysis of intrinsic functional connectivity to characterize the organization of brain networks in 23 children (ages 7-9 y) and 22 young-adults (ages 19-22 y). Comparison of network properties, including path-length, clustering-coefficient, hierarchy, and regional connectivity, revealed that although children and young-adults' brains have similar "small-world" organization at the global level, they differ significantly in hierarchical organization and interregional connectivity. We found that subcortical areas were more strongly connected with primary sensory, association, and paralimbic areas in children, whereas young-adults showed stronger cortico-cortical connectivity between paralimbic, limbic, and association areas. Further, combined analysis of functional connectivity with wiring distance measures derived from white-matter fiber tracking revealed that the development of large-scale brain networks is characterized by weakening of short-range functional connectivity and strengthening of long-range functional connectivity. Importantly, our findings show that the dynamic process of over-connectivity followed by pruning, which rewires connectivity at the neuronal level, also operates at the systems level, helping to reconfigure and rebalance subcortical and paralimbic connectivity in the developing brain. Our study demonstrates the usefulness of network analysis of brain connectivity to elucidate key principles underlying functional brain maturation, paving the way for novel studies of disrupted brain connectivity in neurodevelopmental disorders such as autism.