Family childcare homes (FCCHs) are the second largest provider of childcare in the United States, yet little is known about how this setting influences children's physical activity, particularly related to the physical environment. Thus, the purpose of this study was to determine what aspects of the FCCH physical environment facilitate or hinder children's physical activity. Data were collected from 166 FCCH providers and 496 preschool-aged children in 2013-2014 as part of the Keys to Healthy FCCHs study. Children's moderate-to-vigorous physical activity (MVPA) was measured using Actigraph GT3X+ accelerometers. Wear data from the childcare day were isolated, and cut-points were applied in order to calculate children's minutes of MVPA per hour. FCCH-level estimates of child MVPA per hour were calculated. Indoor and outdoor physical environment characteristics were assessed during a 2-day observation using the Environment and Policy Assessment and Observation modified for FCCHs. General linear models were used to examine the relationship between indoor, portable play equipment, and outdoor FCCH physical environment characteristics and children's MVPA per hour. Only indoor play space was significantly associated with children's MVPA (β=0.33; p=.034), indicating that when provided with more indoor space for active play, children were more physically active. No significant associations were noted between portable play equipment or the outdoor environment and children's MVPA. Indoor space was the only physical environment characteristic associated with children's MVPA, suggesting that teaching FCCH providers how to best utilize their indoor play space for active play may be a way to promote children's physical activity. Futures studies should explore the impact of other environmental characteristics of the FCCH (e.g., provider practices and policies) on children's physical activity.