By using a longitudinal design and functional magnetic resonance imaging (fMRI), our previous study (Wang et al., 2020) found a scaffolding effect of early phonological processing in the superior temporal gyrus (STG) in 6-year-old children on later behavioral reading skill in 7.5-year-old children. Other than this previous study, nothing is known about longitudinal change in the bidirectional relation between reading skill and phonological processing in the brain. To fill this gap, in the current study, we used the same experimental paradigm as in Wang et al. (2020) to measure children's reading skill and brain activity during an auditory phonological awareness task, but with children who were 7.5 years old at Time 1 (T1) and about 1.5 years later when they were 9 years old at Time 2 (T2). The phonological awareness task included both small grain (i.e., onset) and large grain (i.e., rhyme) conditions. In a univariate analysis, we found that better reading skill at T1 predicted lower brain activation in IFG at T2 for onset processing after controlling for brain activation and non-verbal IQ at T1. This suggests that early reading ability reduces the effort of phonemic access, thus supporting the refinement hypothesis. When using general psychophysiological interaction (gPPI), we found that higher functional connectivity from IFG to STG for rhyme processing at T1 predicted better reading skill at T2 after controlling for reading skill and non-verbal IQ at T1. This suggests that the early effectiveness of accessing rhyme representations scaffolds reading acquisition. As both results did not survive multiple comparison corrections, replication of these findings is needed. However, both findings are consistent with prior studies demonstrating that phonological access in the frontal lobe becomes important in older elementary school readers. Moreover, the refinement effect for onsets is consistent with the hypothesis that learning to read allows for better access of small grain phonology, and the scaffolding effect for rhymes supports the idea that reading progresses to larger grain orthography-to-phonology mapping in older skilled readers. The current study, along with our previous study on younger children, indicates that the development of reading skill is associated with (1) the early importance of the quality of the phonological representations to later access of these representations, and (2) early importance of small grain sizes to later development of large grain ones.