Application of fMRI to studies of cognitive development is of growing interest because of its sensitivity and non-invasive nature. However, interpretation of fMRI results in children is presently based on vascular dynamics that have been studied primarily in healthy adults. Comparison of the neurological basis of cognitive development is valid to the extent that the neurovascular responsiveness between children and adults is equal. The present study was designed to detect age-related vascular differences that may contribute to altered BOLD fMRI signal responsiveness. We examined BOLD signal changes in response to breath holding, a global, systemic state change in brain oxygenation. Children exhibited greater percent signal changes than adults in grey and white matter, and this was accompanied by an increase in noise. Consequently, the volume of activation exceeding statistical threshold was reduced in children. The reduced activation in children was well modeled by adding noise to adult data. These findings raise the possibility that developmental differences in fMRI findings between children and adults could, under some circumstances, reflect greater noise in the BOLD response in the brains of children than adults. BOLD responses varied across brain regions, but showed similar regional variation in children and adults.