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Introduction: Participation in extracurricular activities (ECAs) during high school is likely to be associated with higher intrinsic motivation, as well as lower externalizing problems and depressive symptoms, particularly for students in schools located in socioeconomically disadvantaged neighborhoods. However, few studies have explored the processes underlying these positive associations. In this study, we examined whether peer relatedness and school belonging mediated the links between participation in these activities and adolescent academic and psychosocial adjustment and whether another indicator of poverty, namely material deprivation, moderated these links. Methods: Canadian students (n = 638; 59% girls) at disadvantaged high schools were surveyed at two-time points. Results and Conclusions: Results show that peer relatedness can explain the associations between extracurricular activity participation and (a) school intrinsic motivation and (b) depressive symptoms. Results also revealed that the indirect effect involving the number of activities, peer relatedness, and depressive symptoms was only significant among students living in highly deprived areas. These results highlight the contribution of peer relatedness as a potential mediator of the positive association connecting extracurricular activity participation to adjustment among disadvantaged students.