Abstract Children with cerebral palsy (CP) exhibit impaired motor control and significant muscle weakness due to a brain lesion. However, studies that assess the relationship between brain activity and performance on dynamic functional muscle strength assessments in CP are needed. The aim of this study was to determine the effect of a progressive lateral step‐up test on prefrontal cortex (PFC) hemodynamic activity in children with CP. Fourteen ambulatory children with spastic CP (Gross Motor Function Classification System level I; 5–11 y) and 14 age‐ and sex‐matched typically developing control children completed a progressive lateral step‐up test at incremental step heights (0, 10, 15 and 20 cm) using their non‐dominant lower limb. Hemodynamic activity in the PFC was assessed using non‐invasive, portable functional neuroimaging (functional near‐infrared spectroscopy). Children with CP completed fewer repetitions at each step height and exhibited lower PFC hemodynamic activity across step heights compared to controls. Lower PFC activation in CP was maintained after statistically controlling for the number of repetitions completed at each step height. PFC hemodynamic activity was not associated with LSUT task performance in children with CP, but a positive relationship was observed in controls at the most challenging 20 cm step height. The results suggest there is an altered PFC recruitment pattern in children with CP during a highly dynamic test of functional strength. Further studies are needed to explore the mechanisms underlying the suppressed PFC activation observed in children with CP compared to typically developing children.