Idiopathic pulmonary fibrosis (IPF) is a chronic lung disease that manifests in hypoxemia, inactivity, and poor prognosis. This study aimed to assess the prognostic role of physical activity (PA) and exertional desaturation (ED) with mortality in IPF. At baseline, 34 IPF patients (68 (50–81) years) were interviewed using the International Physical Activity Questionnaire (IPAQ), and SpO2 was assessed pre to post 6-min walking test (∆SpO2). Patients were prospectively followed up for 40 months. Receiver operating characteristics curve analysis determined cut-off points associated with mortality, and Cox proportional hazard ratio (HR) were conducted. Thresholds for increased mortality risk in IPF patients were determined as IPAQ ≤ 417 metabolic equivalent task (METS)-min/week, p = 0.004 (HR; 9.7, CI 95% (1.3–71.9), p = 0.027), and ∆SpO2 ≥ 10%, p = 0.002, (HR; 23.3, CI 95% (1.5–365), p = 0.025). This study demonstrated a significant association of PA and ED with mortality in IPF patients. The findings emphasize the clinical importance of PA and ED assessments to aid in IPF risk stratification, prognosis prediction, and in providing early appropriate treatments, such as pulmonary rehabilitation, PA consultation, oxygen supplementation, and lung transplantation referral. These results underscore that even low levels of PA corresponding to 100–105 min/week were associated with a reduced mortality risk and better survival in IPF.