Objective Parents who overestimate their child's physical activity (PA) level may not encourage their children to increase their PA. We assessed parental awareness of child PA, and investigated potential correlates of overestimation. Method Child PA (accelerometer) and parent-classified child PA [‘active’ ≥ 60 min/day vs. ‘inactive’ qqqlt; 60 min/day moderate and vigorous PA (MVPA)] were measured over 7 days [n = 329, 44% male, 39% Latino; mean (SD) 9.1 (0.7) years] in an obesity prevention study in San Diego (Project MOVE). Agreement between date-matched objective MVPA and parent-classified child PA was assessed; % days parental overestimation was the outcome variable. Associations between parental overestimation and potential correlates were investigated using three-level mixed‐effects linear regression. Results Children met the PA guidelines on 43% of days. Parents overestimated their children's PA on 75% of days when children were inactive. Most parents (80%) overestimated their child's PA on ≥ 1 measurement day. Parental support for child PA (transport, encouragement and participation with child) (p qqqlt; 0.01) was positively associated with higher overestimation. Parents of girls showed more overestimation than parents of boys (p = 0.04). Conclusion Most parents incorrectly classified their child as active when their child was inactive. Strategies addressing parental overestimation may be important in PA promotion.