This study compared actual and perceived physical competence of overweight and nonoverweight children. Participants were 109 nonoverweight and 33 overweight Grade 5 and 6 children (mean age 10.8 years). Overweight status was determined using age- and gender-specific international body-mass-index cut-off values. Actual competence was assessed using the Test of Gross Motor Development, 2nd ed., and perceived competence was assessed using an expanded version of the Athletic Competence subscale of the Self-Perception Profile for Children. Overweight children had significantly lower actual and perceived physical competence. When actual competence was partitioned into locomotor and object-control skills, however, differences only existed for locomotor skills. These findings indicate that low actual and perceived physical competence might be important contributing factors in maintaining childhood obesity. Interventions to improve actual and perceived physical competence in overweight children should provide opportunities to learn and master fundamental movement skills in an environment where parents, teachers, and coaches provide positive and specific feedback, encouragement, and modeling.