ObjectivesBuilt on thePositive Youth Development(PYD) framework, this study examined how physical activity affected the subjective well-being of adolescents in the multi-ethnic area of southwest China. The mediating role of school connectedness as an external development asset and the moderating role of resilience as an internal development asset were specified and tested within the framework of sport-based PYD.MethodsA cross-sectional survey of 3143 adolescents (47.2% boys with mean age = 12.88 andSD= 1.68) was conducted in 2020. A structural equation model (SEM) was developed to estimate the direct effect of physical activity, the mediating effect of school connectedness, and the moderating effect of resilience on adolescents’ subjective well-being. Multi-group comparison was made to investigate differences and similarities across three parental absence subgroups: (1) both parents present, (2) one parent absent, and (3) both parents absent.ResultsAs surmised, physical activity, school connectedness, and resilience all positively and significantly affected adolescents’ subjective well-being. SEM analyses revealed that school connectedness mediated the effect of physical activity on subjective well-being. Moreover, resilience moderated both the direct and indirect effects of physical activity (through school connectedness) on subjective well-being. Finally, the multi-group comparison revealed a moderating effect of parental absence on the moderated mediation model.LimitationsThis study is a cross-sectional survey, so inference of causal associations among the study variables is impossible.ConclusionsHealthy lifestyle behaviors, school-supportive settings, and positive individual development assets can enhance the subjective well-being of adolescents in southwest China, especially those whose parents were absent. Physical activity interventions informed by the PYD framework should be incorporated into public health programs designed to foster the physical and mental health of left-behind adolescents in southwest China.Supplementary InformationThe online version contains supplementary material available at 10.1186/s12888-023-04982-8.