Abstract Background Self-reported physical activity is inaccurate, yet few investigators attempt to adjust for measurement error when estimating risks for health outcomes. We estimated what the association between self-reported physical activity and colorectal cancer risk would be if physical activity had been assessed using accelerometry instead. Methods We conducted a validation study in which 235 Australian adults completed a telephone-administered International Physical Activity Questionnaire (IPAQ), and wore an accelerometer (Actigraph GT3X+) for 7 days. Using accelerometer-assessed physical activity as the criterion measure, we calculated validity coefficients and attenuation factors using a structural equation model adjusted for age, sex, education and body mass index. We then used a regression calibration approach to apply the attenuation factors to data from the Melbourne Collaborative Cohort Study (MCCS) to compute bias-adjusted hazard ratios (HR) and 95% confidence intervals (CI). Results Average daily minutes of physical activity from the short form of the International Physical Activity Questionnaire (IPAQ-short) were substantially higher than accelerometer-measured duration (55 versus 32 min). The validity coefficient (0.32; 95% CI: 0.20, 0.43) and attenuation factor (0.20; 95% CI: 0.12, 0.28) were low. The HRs for colorectal cancer risk for high (75th percentile; 411 min/week) versus low (25th percentile; 62 min/week) levels of self-reported physical activity were 0.95 (95% CI: 0.87, 1.05) before and 0.78 (95% CI: 0.47, 1.28) after bias adjustment. Conclusions Over-estimation of physical activity by the IPAQ-short substantially attenuates the association between physical activity and colorectal cancer risk, suggesting that the protective effect of physical activity has been previously underestimated.