The BDNF gene is a prominent promoter of neuronal development, maturation and plasticity. Its Val66Met polymorphism affects brain morphology and function within several areas and is associated with several cognitive functions and neurodevelopmental disorder susceptibility. Recently, it has been associated with reading, reading-related traits and altered neural activation in reading–related brain regions. However, it remains unknown if the intermediate phenotypes (IPs, such as brain activation and phonological skills) mediate the pathway from gene to reading or reading disability. By conducting a serial multiple mediation model in a sample of 94 children (age 5–13), our findings revealed no direct effects of genotype on reading. Instead, we found that genotype is associated with brain activation in reading-related and more domain general regions which in turn is associated with phonological processing which is associated with reading. These findings suggest that the BDNF-Val66Met polymorphism is related to reading via phonological processing and functional activation. These results support brain imaging data and neurocognitive traits as viable IPs for complex behaviors.