The potential of physical activity and sport programs to promote positive youth development (PYD) is well-recognized among youth sport researchers and practitioners. More recently, physical literacy has gained traction among sport organizations as an important component of long-term athlete development. With conceptual roots in academic writing, two approaches to physical literacy emerged: a holistic approach, encompassing cohesive developmental processes and outcomes; and a performance-driven approach, focused largely on physical competencies and performance. This article will evaluate the dual approaches to physical literacy through the lens of PYD. By pairing the theoretical foundation of the holistic approach with the attention to measurement in the performance-driven approach, we subsequently propose an integrated approach to physical literacy grounded firmly in sport and physical activity PYD research. Guided by this approach, we offer key insights and practical recommendations for the implementation of programs that seek to foster both physical literacy and PYD.