Developmental systems theories, and particularly Bronfenbrenner's Bioecological model, recognize that many factors contribute to adolescent development including individual talents, resources and preferences, family factors, school factors, and the neighborhood environment. Extracurricular activities provide yet another context for youth development and participation in such activities has been linked with positive developmental outcomes. This study uses data from a subsample of early adolescents in the 4-H Study of Positive Youth Development to determine whether neighborhood assets (resources available in the neighborhood) moderate the effect of adolescent activity involvement on positive and negative developmental outcomes. The results revealed a complex interplay between individual level factors, including self-regulation and activity involvement, and neighborhood assets. Activity involvement differentially affected youth outcomes depending upon the ecological context in which they are embedded. For example, activity involvement had the greatest influence on youth living in neighborhoods with limited physical resources. Additionally, boys and girls were affected differently by both the amount of time spent in activities and the types of neighborhood supports available. Consistent with Bioecological theory, results from the current study indicate that youth living in lower asset neighborhoods benefit more than their counterparts living in high asset neighborhoods from participation in activities when looking at outcomes of dysfunction. The effect of activity involvement on outcomes of competence is less clear. However, the neighborhood context does matter and is an environment that is amenable to change.