Navigation in spatial contexts has been studied in diverse species, yielding insights into underlying neural mechanisms and their phylogenetic progression. Spatial navigation in humans is marked by age-related changes that may carry important implications for understanding cortical development. The emergence of "allocentric" processing, reflecting that ability to use viewer-independent spatial abstractions, represents an important developmental change. We used fMRI to map brain regions engaged during memory-guided navigation in a virtual reality environment in adolescents and adults. Blood oxygen level-dependent (BOLD) signal was monitored in eight adolescents and eight adults in a 1.5-T MRI scanner during three conditions: (1) memory-guided navigation (NAV); (2) arrow-guided navigation (ARROW); and (3) fixation (FIX). We quantified navigation ability during scanning and allocentric memory after scanning, based on subjects' ability to label a previously unseen, aerial view of the town. Adolescents and adults exhibited similar memory-guided navigation ability, but adults exhibited superior allocentric memory ability. Memory-guided navigation ability during scanning correlated with BOLD change between NAV/ARROWS in various regions, including a right frontal and right-anterior medial temporal lobe region. Age group and allocentric memory together explained significant variance in BOLD change in temporoparietal association cortex and the cerebellum, particularly in the left hemisphere. Consistent with developmental models, these findings relate maturation in the coding of spatial information to functional changes in a distributed, left-lateralized neural network.