The influence of teacher-initiated motivational climate on cognitive, affective, and behavioural student outcomes has been highlighted as an area of future research. This study, grounded in self-determination and achievement goal theories, examined how teacher-initiated motivational climate can increase student motivation and positive affective responses in physical education (PE) along with their physical activity (PA) participation, and whether motivational climate has a longitudinal effect across middle school. In addition, we aimed to examine the role of positive affect in explaining the relationship between motivation in PE and out-of-school PA participation. Our sample comprised 540 adolescents (277 boys, 263 girls, median age 13) and they responded to self-report questionnaires measuring their perception of motivational climate in PE classes (Motivation Climate in Physical Education Questionnaire), motivational regulations (Physical Education Motivation Scale), enjoyment (Sport Enjoyment Scale), and PA participation (Health Behaviour in School-aged Children Research Protocol) twice at both Grades 7 and 9. Structural equation model analyses produced three main findings. First, the study showed that intrinsic motivation was the vital component of motivation that transferred the effect of learning-oriented climate to long-lasting enjoyment in PE context. Second, performance-oriented climate had a long-lasting effect on introjected and extrinsic regulations and amotivation. Finally, the study showed enjoyable experiences in PE to transfer intrinsic motivation into PA participation. The findings of the study extend our understanding on how teacher-initiated motivational climate in PE can lead to an increase in PA participation during middle school.