Public transport (PT) users often accumulate more physical activity (PA) than private motor vehicle users and financial incentives may increase PT use. Responding to rising petrol prices, from 28 March to 1 May 2022, the Tasmanian government made public bus use fare-free. This exploratory study examined the perceived impact of fare-free buses on bus use and PA. Tasmanian adults who had used the fare-free buses (N = 548) completed an online survey (4 May-14 June 2022). Quantitative data were analysed using descriptive and inferential methods and responses to open-ended questions categorised. Over the fare-free period, 46% of participants reported more bus use-average weekly bus trips increased from 3.0 to 4.0 (p < 0.001). Most (81%) participants, including 36% (n = 33/93) who were not previous bus users, planned continued bus use despite financial cost. Total PA was reported higher (36%), the same (60%) and lower (4%) than usual during the fare-free period. Higher total PA was more common amongst those reporting increased bus use (n = 186/240; 78%). Responses to open-ended questions revealed: bus use-related PA gain was through walking to/from bus stops, more frequently attending PA settings (e.g., the gym) and unexpected walking due to bus service limitations; household-level cost savings, improved travel opportunities and better social/mental health were additional fare-free benefits. Fare-free buses were commonly perceived to increase bus use and PA. Intervention studies would determine if PA and financially incentivised PT have a causal relationship. Individual- and societal-level health economic analysis of free PT is warranted.