Objective: The role of psychological need satisfaction in terms of understanding the mechanisms through which leisure‐time physical activity (LTPA) is associated with psychological health in breast cancer survivors who have recently completed treatment was examined. Methods: Adopting a longitudinal two‐wave design, female breast cancer survivors (N = 144) completed self‐report instruments of LTPA, psychological need satisfaction, and psychological health at two points separated by 3 months. The first test administration period was 6 months following the completion of primary treatment. Results: Change score analyses demonstrated that greater LTPA across the 3‐month period was associated with greater perceptions of well‐being (rs ranged from .17 to .20) and lower ill‐being (rs ranged from −.06 to −.21). Results of multiple mediation analyses demonstrated that psychological need fulfillment underpinned the LTPA–well‐being relationship only. Conclusions: Collectively these findings indicate that increased engagement in LTPA represents one factor associated with greater psychological health in breast cancer survivors, with fulfilling the psychological need for relatedness most salient in understanding this relationship. Continued investigation into the mechanisms associated with reductions in ill‐being in breast cancer survivors appear justified.