Many techniques to study early functional brain development lack the whole-brain spatial resolution that is available with fMRI. We utilized a relatively novel method in which fMRI data were collected from children during natural sleep. Stimulus-evoked responses to auditory and visual stimuli as well as stimulus-independent functional networks were examined in typically developing 2-4-year-old children. Reliable fMRI data were collected from 13 children during presentation of auditory stimuli (tones, vocal sounds, and nonvocal sounds) in a block design. Twelve children were presented with visual flashing lights at 2.5 Hz. When analyses combined all three types of auditory stimulus conditions as compared to rest, activation included bilateral superior temporal gyri/sulci (STG/S) and right cerebellum. Direct comparisons between conditions revealed significantly greater responses to nonvocal sounds and tones than to vocal sounds in a number of brain regions including superior temporal gyrus/sulcus, medial frontal cortex and right lateral cerebellum. The response to visual stimuli was localized to occipital cortex. Furthermore, stimulus-independent functional connectivity MRI analyses (fcMRI) revealed functional connectivity between STG and other temporal regions (including contralateral STG) and medial and lateral prefrontal regions. Functional connectivity with an occipital seed was localized to occipital and parietal cortex. In sum, 2-4 year olds showed a differential fMRI response both between stimulus modalities and between stimuli in the auditory modality. Furthermore, superior temporal regions showed functional connectivity with numerous higher-order regions during sleep. We conclude that the use of sleep fMRI may be a valuable tool for examining functional brain organization in young children.