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Extracurricular participation plays an important role in positive youth development. Yet, little is known about the stability and change in extracurricular participation from middle childhood to early adolescence. Also, there is a gap in knowledge about the underlying processes that drive developmental outcomes associated with extracurricular participation. The present study examined transitions in extracurricular participation from grade 4 to 7, and investigated whether shifting from non-participation to participation in activities was associated with better mental health, considering peer belonging as a mediator. Latent Class Analyses of early adolescents' (50% female) self-reports on the Middle Years Development Instrument in grades 4 and 7 (N = 10,149) revealed four clusters of extracurricular involvement at both grade levels (i.e., "no activities", "all activities", "sports only", "individual activities"). Latent Transition Analysis showed that young people were most likely to stay in the same activities cluster from grade 4 to 7. About 10% were non-participants in grade 4 and had moved to activities by grade 7. In this subgroup, moving from non-participation to both sports and to all activities was associated with better mental health over time; this pathway was fully mediated by higher levels of peer belonging. The results suggest that supporting non-participants to join extracurricular activities can have implications for their mental health. Practical implications for communities, such as removing potential barriers to involvement before the onset of adolescence, are discussed.