BACKGROUND: The amount of time children spend in sedentary behaviours may have adverse health effects. OBJECTIVE: To examine the substitution effects of displacing a fixed duration of sedentary time with physical activity (PA) on children's body composition. METHODS: We included 386 children (197 boys). Outcomes were body mass index, waist circumference, total body fat mass and trunk fat mass assessed by dual-energy X-ray absorptiometry. Sedentary time and PA were measured with accelerometers. Data were analysed by isotemporal analyses estimating the effect of reallocating 15 and 30 min d-1 of sedentary time into light (light physical activity), and moderate-to-vigorous (MVPA) PA on body composition. RESULTS: Reallocating 15 and 30 min d-1 of sedentary time into MVPA was negatively associated with body fatness in cross-sectional analyses. Prospectively, reallocating 30 min of sedentary time into 30 min of MVPA was negatively associated with waist circumference (β = -1.11, p < 0.05), trunk fat mass (β = -0.21, p < 0.05), and total body fat mass (β = -0.48, p < 0.05) at follow-up (20 months). The magnitude of associations was half in magnitude and remained significant (p < 0.05) when reallocating 15 min of sedentary time into MVPA. Reallocating sedentary time into light physical activity was not related (p > 0.05) with body fatness outcomes. CONCLUSIONS: Substituting sedentary time with MVPA using isotemporal analysis is associated with positive effects on body composition.