This paper examines the relationships among life satisfaction, positive youth development, and problem behaviour. A total of 7,975 Secondary One students (4,169 boys and 3,387 girls; with most aged 12) of Chinese ethnicity recruited from 48 schools responded tovalidated measures of life satisfaction, positive youth development and problem behaviour. While life satisfaction was positively correlated with different measures of positiveyouth development, these measures were negatively correlated with measures of substance abuse, delinquency and intention to engage in problem behaviour. Based on a series of structural equation models, a non-recursive model was found to best fit the data, which suggests that adolescents having higher levels of positive youth development are more satisfied with life and have fewer problem behaviour, with life satisfaction and problem behaviour negatively reinforcing each other.