This study aims to investigate the underlying cognitive mechanisms of Chinese orthography-to-phonology transformation and its neural correlates. A behavioral study demonstrated that the phonetic radical can be used to suggest the pronunciation of a Chinese pseudocharacter based on the type frequency of the pronunciations associated with its constituent phonetic radical, rather than just to sound out its constituent phonetic radical. The follow-up event-related fMRI (functional magnetic resonance imaging) study further manipulated the lexicality and the phonetic consistency and showed higher brain activations in the left inferior and middle frontal gyrus, the left temporoparietal region (inferior parietal gyrus and supramarginal gyrus), and the left temporooccipital junction for reading low consistency characters compared to high consistency ones. A similar activation pattern can be observed when distinguishing between the brain activation involved when reading pseudocharacters and characters. However, the angular gyrus appears to be activated under the consistency effect in reading pseudocharacters but not for reading words. The contributions of these regions to Chinese orthography-to-phonology transformation are discussed and compared with those of the alphabetic writing system.