Developmental dyscalculia (DD) is marked by specific deficits in processing numerical and mathematical information despite normal intelligence (IQ) and reading ability. We examined how brain circuits used by young children with DD to solve simple addition and subtraction problems differ from those used by typically developing (TD) children who were matched on age, IQ, reading ability, and working memory. Children with DD were slower and less accurate during problem solving than TD children, and were especially impaired on their ability to solve subtraction problems. Children with DD showed significantly greater activity in multiple parietal, occipito-temporal and prefrontal cortex regions while solving addition and subtraction problems. Despite poorer performance during subtraction, children with DD showed greater activity in multiple intra-parietal sulcus (IPS) and superior parietal lobule subdivisions in the dorsal posterior parietal cortex as well as fusiform gyrus in the ventral occipito-temporal cortex. Critically, effective connectivity analyses revealed hyper-connectivity, rather than reduced connectivity, between the IPS and multiple brain systems including the lateral fronto-parietal and default mode networks in children with DD during both addition and subtraction. These findings suggest the IPS and its functional circuits are a major locus of dysfunction during both addition and subtraction problem solving in DD, and that inappropriate task modulation and hyper-connectivity, rather than under-engagement and under-connectivity, are the neural mechanisms underlying problem solving difficulties in children with DD. We discuss our findings in the broader context of multiple levels of analysis and performance issues inherent in neuroimaging studies of typical and atypical development.