Children’s brains dynamically adapt to the stimuli from the internal state and the external environment, allowing for changes in the cognitive and mental behavior of individuals. In this work, we performed a large-scale analysis of dynamic functional connectivity (DFC) in children aged 9~11 years, investigating how brain dynamics relate to cognitive performance and mental health during an early age. An adaptive independent component analysis framework was applied to the Adolescent Brain Cognitive Development (ABCD) data containing 10,988 children. We combined a sliding-window approach with k-means clustering to identify five reoccurring brain states with distinct DFC patterns. Interestingly, the occurrence of a strongly connected state was negatively correlated with cognitive performance and positively correlated with dimensional psychopathology in children. Meanwhile, the opposite relationships were observed for a sparsely connected state. The composite scores, the attention score, and the Attention-Deficit/Hyperactivity Disorder score were the most significantly correlated with the DFC states. The cognitive and psychiatric relevance of DFC states were highly reproducible across scans and between longitudinal sessions. Finally, the mediation analysis showed that the attention problems mediate the effect of DFC states on cognitive performance. This investigation unveils the neurological underpinnings of DFC by highlighting their robust associations with behavioral development in childhood. Tracking the patterns of maturation in DFC states may capture delays in development and guide people to provide early intervention to buffer adverse influences in children’s development.