Multiple hypotheses have been proposed to explain the reading difficulty caused by developmental dyslexia (DD). The current study examined visuo-orthographic processing in children with dyslexia to determine whether orthographic deficits are explainable based solely on visual deficits. To identify orthographic-specific, visual perception-specific, and overlapping deficits, we included two tasks (lexical and perceptual) in three Chinese subject groups: children with DD, age-matched controls (AC), and reading matched controls (RC) using functional magnetic resonance imaging (fMRI). We found that the left precuneus showed decreased activation across both tasks for the DD group compared to the two control groups, thus reflecting visual processing deficits in children with DD, which also affects orthographic processing. Furthermore, we found that the functional connectivity between left middle occipital gyrus (LMOG) and left inferior frontal gyrus (IFG) was decreased in the DD group compared to AC and RC for only the lexical task. This suggests a weaker association between orthography and phonology for children with DD. In addition, the children with DD showed decreased functional connectivity between the LMOG and right parahippocampal gyrus for only the visual perceptual task, thereby indicating a weaker association between visual regions for DD during visual symbol processing. Taken together, our findings suggest that the observed orthographic processing deficit in DD might be driven by both a basic visual deficit, and a linguistic deficit.