Research shows that mental wellbeing contributes to a greater quality of life and longevity, superior overall health, life success, and fulfillment. High mental wellbeing, such as flourishing and thriving, is associated with a sense of meaning and purpose, mastery and accomplishment, social connectedness, optimism, and contribution to society. Nature-based physical activity participation has been linked with mental wellbeing enhancement over and above the impact of physical activity alone. The present study sought to address a gap in the research by exploring whether the environment in which physical activity takes place and one’s gender moderate the relationship between activity time and various indices of mental wellbeing. Using a mixed methods design, participants (N = 235) aged 18 to 76 (M = 33.41, SD = 13.41) completed an online survey. We divided participants into three groups based on their preferred type of physical activity: indoor, outdoor non-nature-based, and outdoor nature-based physical activity. The moderation analyses highlight the importance of the environment in physical activity, with outdoor nature-based settings consistently showing positive associations with flourishing and thriving. These findings suggest that engaging in physical activities in natural environments can significantly predict an individual's mental wellbeing, for both males and females. Qualitative data supported the findings and also revealed that nature-based physical activity achieves these benefits through developing positive affect, social closeness and engagement, purpose, enhanced experiences, and interests beyond oneself. Findings from this study demonstrate the importance of nature-based physical activity for mental wellbeing promotion and protection, indicating that opportunities for nature-based physical activity should be more effectively provided, perhaps across multiple domains of life such as education, sport, public health, and urban planning.