Limited evidence exists concerning knowledge and understanding of how to optimally support residents’ physical activity, mobility and functional independence in residential aged care homes. An interpretive qualitative study was conducted to explore residents’ perceptions and experiences of opportunities for physical activity and functional independence, and how physical activity and functional independence are challenged in their care home environment. Purposefully sampled 24 participants (male = 13) from five not‐for‐profit residential aged care homes in the outskirts of a metropolitan area in Australia, were interviewed between August and September 2017. Maintaining independence was found to be the utmost priority for nearly all participants in this study. Yet, many did not make the connection between physical activity and independence, and regarded ‘exercise’ as an inappropriate activity for them, perceiving it as high‐impact, high‐intensity activity in commercial gyms that was only appropriate for the young. Walking and gardening were found to be most popular. Walking could be a physical activity, social activity, solo recreational activity and a means of maintaining mobility and functional independence—all of which residents considered to be appropriate to them and achievable. The study identified key factors influencing physical activity and functional independence of residents: levels of activity prior to living in residential aged care, ageism, social capital and loss of a loved one, pain and staff support. Findings highlight the need for a ‘flexible and inclusive’ approach in facilitating the resident's physical activity, and a greater role for staff in encouraging residents’ engagement in, and communicating the benefits and requirements of, physical activity, through, for example, motivational interviewing.