Children with temporal lobe epilepsy frequently suffer memory deficits, often marked in face processing. To determine the neural correlates of this dysfunction, we investigated face processing in adolescents with intractable epilepsy compared to typically developing controls. The M170 and M220 MEG event-related fields (ERFs) were recorded while the adolescents completed an n-back task on blocks of upright and inverted faces. Source analyses of the ERF data were performed using an event-related beamforming technique that allowed the detection of multiple sources. The control adolescents showed the expected waveforms and inversion effects, although there were differences in source localization, compared to the adult literature. The participants with epilepsy had poor performance on the tasks. The adolescents with extra-temporal lobe epilepsy showed both the M170 and M220 but the source localizations were highly atypical. The patients with right temporal lobe epilepsy had an absent or highly atypical M220, a component related to face recognition processes. We hypothesize that the children with extra-temporal lobe epilepsy have difficulty with face encoding processes while the patients with right temporal lobe epilepsy have specific difficulty with face recognition.