ABSTRACT Previous research suggests that book reading and screen time have contrasting effects on language and brain development. However, few studies have explicitly investigated whether children's brains function differently during these two activities. The present study used functional near‐infrared spectroscopy (fNIRS) to measure brain response in 28 typically developing preschool‐aged children (36–72 months old) during two conditions—a book reading condition, in which children listened to a story read by a live experimenter while viewing words and pictures in a book, and a screen time condition, in which children listened to a story that was played via an audio recording while viewing words and pictures on a screen. Analyses revealed significant activation in the right temporal parietal junction (TPJ) during the book reading condition only. Across regions of interest (ROIs), including the inferior and middle frontal gyrus (IMFG), the superior and middle temporal gyrus (SMTG), and the TPJ, brain response during the book reading condition was greater in right‐lateralized ROIs than left‐lateralized ROIs, while brain response during the screen time condition was similar across left and right ROIs. Findings suggest that the lateralization of preschool‐aged children's brain function within these ROIs differs during book reading and screen time, which provides a possible neurobiological explanation for why book reading and screen time impact language development in such different ways. Findings provide important insights into how children's brains function during different types of activities (dyadic vs. solitary) and when using different types of media (print vs. digital).