Positive aspects of sexuality remain understudied among young people globally, and consensus is lacking on how to conceptualise different aspects of healthy adolescent sexuality development in order to guide programmes, research, and policy. We propose a conceptual framework that draws on theories and literature related to positive youth development, empowerment, human rights, gender, social-ecological and life-course perspectives. The framework highlights six key competencies for healthy adolescent sexuality development: (1) sexual literacy, (2) gender-equal attitudes, (3) respect for human rights and understanding consent, (4) critical reflection skills, (5) coping skills, and (6) interpersonal skills. These competencies have the potential to strengthen or impede adolescents’ sense of sexual wellbeing in relation to both themselves (e.g. body image, self-efficacy) and others (e.g. mutually respectful relationships). Whether adolescents are able to translate competencies into desired actions and achieve a sense of sexual wellbeing depends on the resources available to them, their agency, and on the influence of social-ecological opportunity structures. The framework can provide concrete direction for sexual and reproductive health practitioners and researchers by providing a platform for recognising and operationalising indicators of healthy sexuality development, and serve as a Theory of Change for programmes aiming to improve adolescent sexual and reproductive health and wellbeing. Our assets-based, life-course approach can also be used to make the case to donors and policymakers for why early investments and positive approaches to adolescent sexuality are needed to achieve sexual wellbeing over time.