Objective: This study examines the associations between objectively measured sedentary behavior, light physical activity (LPA), and moderate-to-vigorous physical activity (MVPA), and plasma lipids in overweight and obese children. Design and Methods: Cross-sectional analyses were conducted among 126 children aged 5.5-9.9 years. Sedentary behavior, LPA, and MVPA were assessed using accelerometry. Fasting blood samples were analyzed for plasma lipids (high-density lipoprotein cholesterol [HDL-C], low-density lipoprotein cholesterol [LDL-C], total cholesterol [TC], and triglycerides [TG]). Results: MVPA was not related to plasma lipids (P > 0.05). Independent of age, sex, energy intake, and waist circumference z-score, sedentary behavior and LPA were associated with HDL-C (β = −0.23, 95% CI −0.42 to −0.04, P = 0.020; β = 0.20, 95% CI 0.14 to 0.39, P = 0.036, respectively). The strength of the associations remained after additionally adjusting for MVPA (sedentary behavior: β = −0.22, 95% CI −0.44 to 0.006, P = 0.056; LPA: β = 0.19, 95% CI −0.005 to 0.38, P = 0.056, respectively). Conclusion: Substituting at least LPA for sedentary time may contribute to the development of healthy HDL-C levels among overweight and obese children, independent of their adiposity. Comprehensive prevention and treatment strategies to improve plasma HDL-C among overweight and obese children should target reductions in total sedentary time and promote the benefits of LPA, in addition to promoting healthy levels of adiposity, healthy dietary behaviors, and MVPA.