Background: Time spent in university represents a period of transition and may be an appropriate time to promote physical activity among young adults. The aim of this study was to assess participation of university students in sport and physical activity in Ireland and to explore the association between physical activity and perceptions of overall health, mental health, and happiness. Methods: The Student Activity and Sport Study Ireland was a cross-sectional online survey among a representative sample (n = 8122) of university students in Ireland. Binary logistic regressions were performed to examine associations between self-reported physical activity and gender (predictor variables) and individual perceptions of overall health, mental health, and happiness (binary outcomes). Results: Only 64.3% of respondents met the recommended level of 150 minutes of moderate to vigorous physical activity per week with males significantly more active than females (72.1% vs 57.8% meeting guidelines). Those meeting physical activity guidelines were more likely to report greater overall health and higher mental health and happiness scores compared with their inactive peers. Conclusions: Active students enjoy better health (overall and mental) and are happier than their inactive peers. This provides a clear rationale for providing students with opportunities to be active at university. The data provide a baseline to monitor changes in physical activity patterns.