The introduction of the Foundation Phase gave a unique opportunity to study the interpretation and delivery of a play-based early childhood curriculum. This new curriculum saw the disappearance of Physical Education for pupils under the age of seven in Wales. Physical Education is acknowledged as more than the development of physical competence, being part of a process concerned with lifelong physical, intellectual, social and emotional learning accrued through a range of physical activities, in a variety of contexts (Doherty and Brennan, 2008). As such a goal of Physical Education is physical literacy, (Hardman, 2011; Talbot, 2007). In light of this, this research set out to explore the contribution of the Foundation Phase to the development of children’s physical literacy. In order to achieve this, a three-phase complementarity mixed-methods design (Greene et al., 1989) was used to generate data over two years in selected schools in Wales. The schools were found to be enacting the Foundation Phase with fidelity to the original aims of the policy makers by demonstrating the key features of play-based active learning, focused adult-led sessions, child-initiated learning, and use of the outdoors for learning. In so doing they were deemed to be successful in achieving the aim of the Foundation Phase of developing independent, motivated active learners. The Foundation Phase was also found to be supporting the development of children’s cognitive development with good levels of achievement in literacy and numeracy assessments. The playful pedagogy observed in the schools enabled the pupils to have autonomy in their learning. Pupils were motivated, active and engaged in embodied learning both indoors and outdoors. The findings indicated that the Foundation Phase was making a positive contribution to the development of children’s physical literacy.