A gap in physical literacy (PL) oriented professional development (PD) for generalist teachers exists and thus their capacity to develop PL and maximize student health is potentially limited. We explored the feasibility of a novel job-embedded professional development (JEPD) program (10 weeks) and its impact on teachers’ capacity to deliver PL-enriched physical education (PE) and student PL. A pragmatic feasibility trial with mixed methods included quantitative measurements of teacher PL, knowledge and confidence (pre), and knowledge, confidence, satisfaction and intention (post), as well as self-reported change, to evaluate the impact on teacher capacity and practices. A pre–post comparison of student PL outcomes (motor skills using PLAYbasic, Sport for Life, Victoria, BC, Canada) during the JEPD and teacher implementation phase explored the impact on student PL. In total, 15/44 teachers participated in surveys and 11/44 completed interviews (87% female, mean age bracket = 25–44 years). Confidence to deliver PL enhancing PE increased significantly after JEPD (p < 0.0001). Teachers were highly satisfied with the JEPD (X = 4.67/5) and intended to change their practices (X = 4.09/5). At three months, teachers reported changes including enhanced lesson planning, increased activity variety (often from the JEPD), intentional skill development, student-focused discussions, introductory, transition, and closing activities, and more equipment adaptations. During JEPD, with the exception of throwing (p < 0.0001), children’s (47% female, mean age = 7.9 (1.7)) change in running, jumping, kicking and balance walking backwards did not differ from usual practice (UP). During teacher implementation, motor skill competence regressed; confounding factors could not be ruled out. JEPD appears feasible and effective for changing teacher capacity to deliver PL and enhancing PE; however, post-JEPD teacher implementation and outcomes need further exploration.