A long-standing question in developmental science is how the neurodevelopment of the brain influences cognitive functions. Here, we examined the developmental change of resting EEG power and its links to vocabulary acquisition in school-age children. We further explored what mechanisms may mediate the relation between brain rhythm maturation and vocabulary knowledge. Eyes-opened resting-state EEG data were recorded from 53 typically-developing Chinese children every 2 years between the ages of 7 and 11. Our results showed first that delta, theta, and gamma power decreased over time, whereas alpha and beta power increased over time. Second, after controlling for general cognitive abilities, age, home literacy environment, and phonological skills, theta decreases explained 6.9% and 14.4% of unique variance in expressive vocabulary at ages 9 and 11, respectively. We also found that beta increase from age 7 to 9 significantly predicted receptive vocabulary at age 11. Finally, theta decrease predicted expressive vocabulary through the effects of phoneme deletion at age 9 and tone discrimination at age 11. These results substantiate the important role of brain oscillations at rest, especially theta rhythm, in language development. The developmental change of brain rhythms could serve as sensitive biomarkers for vocabulary development in school-age children, which would be of great value in identifying children at risk of language impairment.