Objective <p>This study investigated the protective effect of family functioning on adolescent mobile phone dependence, tested whether positive youth development mediated this association, and evaluated whether physical activity moderated the direct and indirect pathways.</p> Methods <p>A cross-sectional survey of 588 Chinese adolescents was conducted using the Family APGAR Index, Positive Youth Development Very Short Form, Mobile Phone Involvement Questionnaire, International Physical Activity Questionnaire Short Form, and a moderated mediation model was tested.</p> Results <p>Family functioning positively predicted positive youth development, with physical activity significantly moderating this relationship. Additionally, moderated mediation analysis revealed that a significant direct effect of family functioning on reduced mobile phone dependence emerged only for adolescents with high physical activity. Meanwhile, indirect effects through adolescent positive youth development were significant at moderate and high physical activity levels but absent at low levels.</p> Conclusion <p>These results highlight that physical activity serves as a crucial moderator in the relationship between family functioning, positive youth development, and mobile phone dependence. Enhancing adolescents’ physical activity may amplify the protective benefits of strong family functioning, promote positive development and ultimately reduce mobile phone dependence. Targeted interventions incorporating physical activity could thus optimize family-oriented strategies to manage adolescent phone dependence.</p>