Background: Physical activity (PA) is important to mental and physical health. Physical education (PE) lessons have the potential to increase daily moderate to vigorous PA (MVPA) and reduce sedentary time (SED). We measured MVPA and SED in primary school PE, determined the contribution of PE to daily MVPA and SED, and compared PA on days with and without PE. Methods: PA was measured in 504 first (ages 7-9) and second (ages 10-12) school level children for 1 school week, with inclusion criteria of at least 10 hours of valid data. Linear mixed methods were used for data analysis. Results: In PE, students spent 28.6 ± 16.5% in MVPA and 29.3 ± 19.8% in SED. Each additional MVPA minute in PE was associated with 1.4 more daily MVPA minutes. On days with PE, students had 12.8 (95% CI 10.5; 15.0) minutes more MVPA and 9.7 (95% CI 16.3; 3.1) minutes less SED compared with days without PE. Conclusions: Although MVPA in PE was relatively low and SED high, PE significantly increased daily MVPA and reduced SED, confirming the important role of PE in supporting the healthy development of children.