The hippocampus is functionally specialized along its longitudinal axis with intricate interactions with cortical systems, which is crucial for understanding development and cognition. Using a well-established connectopic mapping technique on two large resting-state functional MRI datasets, we systematically quantified topographic organization of the hippocampal functional connectivity (hippocampal gradient) and its cortical interaction in developing brains. We revealed hippocampal functional hierarchy within the large-scale cortical brain systems, with the anterior hippocampus preferentially connected to an anterior temporal (AT) pathway and the posterior hippocampus embedded in a posterior medial (PM) pathway. We examined the developmental effects of the primary gradient and its whole-brain functional interaction. We observed increased functional specialization along the hippocampal long axis and found a general whole-brain connectivity shift from the posterior to the anterior hippocampus during development. Using phenotypic predictive modeling, we further delineated how the hippocampus is differentially integrated into the whole-brain cortical hierarchy underlying episodic memory and identified several key nodes within PM/AT systems. Our results highlight the importance of hippocampal gradient and its cortical interaction in development and for supporting episodic memory.