The Apple Watch is one of the most popular wearable devices designed to monitor physical activity (PA). However, it is currently unknown whether the Apple Watch accurately estimates children's free-living PA. Therefore, this study assessed the concurrent validity of the Apple Watch 3 in estimating moderate-to-vigorous physical activity (MVPA) time and active energy expenditure (AEE) for school-aged children under a simulated and a free-living condition. Twenty elementary school students (Girls: 45%, age: 9.7 ± 2.0 years) wore an Apple Watch 3 device on their wrist and performed prescribed free-living activities in a lab setting. A subgroup of participants (N = 5) wore the Apple Watch for seven consecutive days in order to assess the validity in free-living condition. The K5 indirect calorimetry (K5) and GT3X+ were used as the criterion measure under simulated free-living and free-living conditions, respectively. Mean absolute percent errors (MAPE) and Bland-Altman (BA) plots were conducted to assess the validity of the Apple Watch 3 compared to those from the criterion measures. Equivalence testing determined the statistical equivalence between the Apple Watch and K5 for MVPA time and AEE. The Apple Watch provided comparable estimates for MVPA time (mean bias: 0.3 min, p = 0.91, MAPE: 1%) and for AEE (mean bias: 3.8 kcal min, p = 0.75, MAPE: 4%) during the simulated free-living condition. The BA plots indicated no systematic bias for the agreement in MVPA and AEE estimates between the K5 and Apple Watch 3. However, the Apple Watch had a relatively large variability in estimating AEE in children. The Apple Watch was statistically equivalent to the K5 within ±17.7% and ±20.8% for MVPA time and AEE estimates, respectively. Our findings suggest that the Apple Watch 3 has the potential to be used as a PA assessment tool to estimate MVPA in school-aged children.