Health behavior models are widely used in prevention research with children and adolescents; yet, many of these models were developed based on adult experiences and fail to consider the development of health constructs. The concept of health capacity development is a theoretical model of how health capacities, the health-related developmental sociocultural resources individuals use to regulate their coactions with their environments to sustain health, develop. Health capacities are formed through person-environment transactions and thus, are informed by, and help individuals manage, the opportunities and constraints situated in their environments. The extent to which health capacities support long-term adaptive health development varies; yet, health capacities may be leveraged for adaptative functioning. Grounded in the Life Course Health Development (LCHD) framework and the principles of Relational Developmental Systems (RDS) metatheory, the development of three health capacities, their role in managing person-environment coactions, and their potential for facilitating displays of resilient functioning in inequitable contexts are described. Implications of the model, its limitations, and avenues for future research are discussed.