Background <p>“Involution” and “lying flat” are typical societal mindsets among Chinese youth under pressure and resource scarcity, corresponding to “excessive competition” and “passive withdrawal” respectively. However, longitudinal research on the temporal causality and underlying mechanisms between these mindsets and physical exercise (as an adaptive coping mechanism) is lacking.</p> Methods <p>This study adopted an explanatory sequential mixed-methods design. Quantitatively, based on COR theory and SDT, a one-year, three-wave longitudinal survey was conducted with 492 youth (20–35 years old) from Shaanxi, Hubei, and Sichuan provinces, constructing a cross-lagged model (CLPM) to examine the interrelations between involution perceptions, lying flat behavior, physical exercise, and Personal Sense of Mastery. Qualitatively, semi-structured interviews with youth of different occupations revealed the generative logic of causal mechanisms.</p> Results <p>Results showed that physical exercise significantly buffered involution, activated "lying flat" groups, and had bidirectional negative predictive effects with both mindsets. Personal Sense of Mastery played a mediating role, with early physical exercise predicting later involution and lying flat through it. Qualitative findings corroborated this and indicated occupational differences in mechanisms.</p> Conclusions <p>This study highlights physical exercise’s long-term impact on youth mindsets, offering insights for context-specific interventions. Future research should explore causal boundary conditions to optimize targeted exercise interventions.</p>