To determine the physical literacy, defined as the capability for a physically active lifestyle, of children with medical conditions compared with healthy peers, this multicenter cross-sectional study recruited children with medical conditions from cardiology, neurology (including concussion), rheumatology, mental health, respirology, oncology, hematology, and rehabilitation (including cerebral palsy) clinics. Participants aged 8-12 years (N = 130; mean age: 10.0 ± 1.44 years; 44% female) were randomly matched to 3 healthy peers from a normative database, based on age, gender, and month of testing. Total physical literacy was assessed by the Canadian Assessment of Physical Literacy, a validated assessment of physical literacy measuring physical competence, daily behaviour, knowledge/understanding, and motivation/confidence. Total physical literacy mean scores (/100) did not differ (t(498) = -0.67; p = 0.44) between participants (61.0 ± 14.2) and matched healthy peers (62.0 ± 10.7). Children with medical conditions had lower mean physical competence scores (/30; -6.5 [-7.44 to -5.51]; p < 0.001) but higher mean motivation/confidence scores (/30; 2.6 [1.67 to 3.63]; p < 0.001). Mean daily behaviour and knowledge/understanding scores did not differ from matches (/30; 1.8 [0.26 to 3.33]; p = 0.02;/10; -0.04 [-0.38 to 0.30]; p = 0.81; respectively). Children with medical conditions are motivated to be physically active but demonstrate impaired movement skills and fitness, suggesting the need for targeted interventions to improve their physical competence. Novelty: Physical literacy in children with diverse chronic medical conditions is similar to healthy peers. Children with medical conditions have lower physical competence than healthy peers, but higher motivation and confidence. Physical competence (motor skill, fitness) interventions, rather than motivation or education, are needed for these youth.