Public health measures introduced to combat the COVID-19 pandemic have impacted the physical activity, health, and well-being of millions of people. This grounded theory study explored how the COVID-19 pandemic has affected physical activity and perceptions of health among adults in a Canadian city (Calgary). Twelve adults (50% females; 20–70 years) were interviewed between June and October (2020) via telephone or videoconferencing. Using a maximum variation strategy, participants with a range of sociodemographic characteristics, physical activity levels, and perceptions of seriousness and anxiety related to COVID-19 were selected. Semi-structured interviews captured participant perceptions of how their physical activity and perceptions of health changed during the pandemic. Using thematic analysis, four themes were identified: (1) Disruption to Daily Routines, (2) Changes in Physical Activity, (3) Balancing Health, and (4) Family Life. Participants experienced different degrees of disruption in their daily routines and physical activity based on their individual circumstances (e.g., pre-pandemic physical activity, family life, and access to resources). Although participants faced challenges in modifying their daily routines and physical activity, many adapted. Some participants reported enhanced feelings of well-being. Public health strategies that encourage physical activity and promote health should be supported as they are needed during pandemics, such as COVID-19.