Life satisfaction is crucial for healthy development into adulthood. However, it is yet largely unknown how life satisfaction develops in the transition to adulthood. This study examined life satisfaction development in this transition and paid special attention to differences between boys, girls, children of immigrants, and nonimmigrants. Unique longitudinal data of seven waves (2010–2018) of the Children of Immigrants Longitudinal Survey Germany were used. Respondents (N = 3757, 54% girls, 78% nonimmigrants, Mage weighted = 14.6, SD = 0.6 at wave 1) were followed between ages 14 and 23 and multi-level random effect models were applied. Life satisfaction developed in a nonlinear way in the transition to adulthood (M-shape), with overall decreases between age 17 and 18 and between age 20 and 23. Girls reported lower life satisfaction levels in adolescence and more unstable trajectories than boys, where girls with immigrant backgrounds represented the least advantageous life satisfaction trajectory. Differences in life satisfaction between groups decreased from age 19 onwards.