Background: The distance between home and school is the most consistent predictor of active transport in youth: the closer an individual lives to school, the more likely they are to use active transport. While this suggests that it is preferable to live as close to school as possible, the limited physical activity accumulated during short trips may not offer substantial benefits to active transporters. Methods: The current study investigated the predicted physical activity benefits associated with a range of home-school distances in 595 young people aged 5 to 16 years (Years 1 to 11). Physical activity was measured using sealed pedometers over 7 days. Participants' home addresses and usual transport mode to and from school were collected via a questionnaire completed by parents (Years 1 to 6) and participants (Years 7 to 11). Results: A nonlinear relationship between predicted weekday activity and distance was detected, such that the high probability of active transport at short distances was offset by the low physical activity associated with walking short distances. Conclusions: A distance of approximately 2 km was associated with the best physical activity outcomes related to active transport (9% to 15% increase on weekdays). These findings have potential implications for future interventions and for planning residential developments or facilities.