Purpose: The purpose of this study was to examine the impact of ability grouping on game performance and physical activity levels of elementary school students during an invasion game. Method: Forty-eight fifth-grade students (22 girls) participated in eight games of “Over the Line Ball.” Four of these games saw students in matched-ability teams (either all higher skilled or all lower skilled players), whereas in four games teams consisted of two higher skilled and two lower skilled players. A full factorial mixed analysis of variance was conducted, where ability grouping served as a within-subjects variable, and student gender and skill level served as between-subjects variables. Hierarchical linear regression analysis was used to determine the influence of game performance, grouping condition, and gender on moderate–vigorous physical activity. Results: There was a disordinal interaction between skill level and ability grouping on each of three performance variables (percentage success, rate of play, and game performance). Students’ skill level and the homogeneity of games provided the best prediction of moderate–vigorous physical activity over and above the game performance scores alone. Conclusion: Grouping students into matched-ability-level games increased opportunities for success and physical activity for lower skilled students.