Objectives: In this study, we examined physical activity (PA) levels among Jewish and Arab adolescents in Israel, as well as factors associated with PA. We used a socio-ecological framework to understand differences in levels of PA across ethnic groups and the factors associated with these differences. Methods: We used data based on the Israeli population as reported in the 2014-15 Health Behavior of School-Aged Children standardized survey, which studied 16,145 Israeli adolescents. Levels of PA, as well as parent, sibling, and peer engagement in PA, in-school PA breaks, and liking PA were measured across ethnic groups and sex. Results: Jewish adolescents reported higher levels of PA. Girls were significantly less physically active than boys in both ethnicities. In addition, we found that family, peer, and school related factors were positively associated with levels of PA. Conclusions: Our findings show a disparity in PA levels by ethnicity among Israel adolescents, which can lead to health disparities. We propose targeted interventions involving the factors affecting PA to reduce health disparities.