Direct (systematic) observation has been a mainstay of my research for over three decades. I believe it is an important tool for assessing physical activity, because it can simultaneously provide contextually rich data on the setting in which the activity occurs. It is particularly useful for those interested in using ecological and cognitive-behavioral approaches to examine how physical and social environments influence physical activity, and it is currently the only method for assessing group physical activity in open environments. Because physical activity researchers use the method infrequently, this paper provides an overview of systematic observation as it applies to studying physical activity. (Contains 1 note, 1 table and 1 figure.)