Reading is one of the most important skills human beings can acquire, but has proven difficult to study naturalistically using functional magnetic resonance imaging (fMRI). We introduce a novel Event-Related Reading (ERR) fMRI approach that enables reliable estimation of the neural correlates of single-word processing during reading of rapidly presented narrative text (200-300 ms/word). Application to an fMRI experiment in which subjects read coherent narratives and made no overt responses revealed widespread effects of orthographic, phonological, contextual, and semantic variables on brain activation. Word-level variables predicted activity in classical language areas as well as the inferotemporal visual word form area, specifically supporting a role for the latter in mapping visual forms onto articulatory or acoustic representations. Additional analyses demonstrated that ERR results replicate across experiments and predict reading comprehension. The ERR approach represents a powerful and extremely flexible new approach for studying reading and language behavior with fMRI.