While magnetoencephalography (MEG) is of increasing utility in the assessment of pediatric patients with seizure disorders, this indication reflects only a part of the clinical potential of the technology. Beyond epilepsy, a broad range of developmental psychiatric disorders require the combined offerings of spatial and temporal resolution, along with direct sensitivity to neural electrical activity, that are offered by MEG. This article reviews the application of MEG in the study of auditory processing as an aspect of language impairment in children. Potential application is elaborated in the clinical case of autism spectrum disorders, a devastating disorder with prevalence of 1 in 150, poorly served by alternative imaging modalities. MEG offers both spatial and temporal insights, tentatively described as "electrophysiological signatures". Results demonstrate the sensitivity of MEG for detection of abnormalities of auditory processing in ASD and their clinical correlates. These findings offer promise for the comprehensive assessment of developmental neuropsychiatric disorders such as autism, but also suggest avenues for the development of MEG technology to adequately meet the needs of such populations, as well as providing conduits to basic sciences including neurobiology and genetics.