Recent neuroimaging studies support the view that a left-lateralized brain network is crucial for language development in children. However, no previous studies have demonstrated a clear link between lateralized brain functional network and language performance in preschool children. Magnetoencephalography (MEG) is a noninvasive brain imaging technique and is a practical neuroimaging method for use in young children. MEG produces a reference-free signal, and is therefore an ideal tool to compute coherence between two distant cortical rhythms. In the present study, using a custom child-sized MEG system, we investigated brain networks while 78 right-handed preschool human children (32-64 months; 96% were 3-4 years old) listened to stories with moving images. The results indicated that left dominance of parietotemporal coherence in theta band activity (6-8 Hz) was specifically correlated with higher performance of language-related tasks, whereas this laterality was not correlated with nonverbal cognitive performance, chronological age, or head circumference. Power analyses did not reveal any specific frequencies that contributed to higher language performance. Our results suggest that it is not the left dominance in theta oscillation per se, but the left-dominant phase-locked connectivity via theta oscillation that contributes to the development of language ability in young children.