Adolescence is a key period for the maturation of cognitive control during which cortical circuitry is refined through processes such as synaptic pruning, but how these refinements modulate local functional dynamics to support cognition remains only partially characterized. Here, we used data from a longitudinal, adolescent cohort (N = 134 individuals ages 10-31 years, N = 202 total sessions) that completed MRI scans at ultra-high field (7 Tesla). We used resting state fMRI data to compute surface-based regional homogeneity (ReHo)-a measure of time-dependent correlations in fMRI activity between a vertex and its immediate neighbors-as an index of local functional connectivity across the cortex. We found widespread decreases in ReHo, suggesting increasing heterogeneity and specialization of functional circuits through adolescence. Decreases in ReHo included a spatial component which overlapped with sensorimotor and cingulo-opercular networks, in which ReHo decreases were associated with developmental stabilization of working memory performance. We show that decreases in ReHo are associated with higher intrinsic coding dimensionality, demonstrating how functional specialization of these circuits may confer computational benefits by facilitating increased capacity for encoding information. These results suggest a remodeling of cortical activity in adolescence through which local functional circuits become increasingly specialized, higher-dimensional, and more capable of supporting adult-like cognitive functioning.