The mysteries of early development of cortical processing in humans have started to unravel with the help of new non-invasive brain research tools like multichannel magnetoencephalography (MEG). In this review, we evaluate, within a wider neuroscientific and clinical context, the value of MEG in studying normal and disturbed functional development of the human somatosensory system. The combination of excellent temporal resolution and good localization accuracy provided by MEG has, in the case of somatosensory studies, enabled the differentiation of activation patterns from the newborn's primary (SI) and secondary somatosensory (SII) areas. Furthermore, MEG has shown that the functioning of both SI and SII in newborns has particular immature features in comparison with adults. In extremely preterm infants, the neonatal MEG response from SII also seems to potentially predict developmental outcome: those lacking SII responses at term show worse motor performance at age 2 years than those with normal SII responses at term. In older children with unilateral early brain lesions, bilateral alterations in somatosensory cortical activation detected in MEG imply that the impact of a localized insult may have an unexpectedly wide effect on cortical somatosensory networks. The achievements over the last decade show that MEG provides a unique approach for studying the development of the somatosensory system and its disturbances in childhood. MEG well complements other neuroimaging methods in studies of cortical processes in the developing brain.