Background: Motivation for physical education (PE) is considered an important factor for the development of children's physical skills during PE. According to self-determination theory, satisfaction of the psychological needs of autonomy, relatedness, and competence is related to higher levels of autonomous motivation, and lower levels of controlled motivation. To get a better insight into these relations, the present study examines whether satisfaction of the psychological needs is predictive of fundamental motor skills (FMS) and PE-related skills, both directly, and indirectly (via motivation, i.e. 'the motivational sequence'). As PE-related skills are more representative to the skills that are generally practiced during PE, the strongest relations are expected for these types of skills. Method: In this study, 2224 children (51.6% boys, mean age 11.8 ± 0.55) of 89 primary schools filled out questionnaires assessing the satisfaction of their basic psychological needs and their motivation for PE. Using a block design, FMS were assessed using standardized tests, and a diverse set of PE-related skills that are explicitly practiced during PE-lessons were tested using valid and reliable tests. Structural equation models were built in Mplus to examine the hypothesized relations. Results: Competence, peer-relatedness, and teacher-relatedness were predictive of autonomous motivation, whereas only peer-relatedness was predictive of controlled motivation. Different relations with psychological needs and motivation were found for FMS and PE-related skills. Autonomous and controlled motivation predicted PE-related skills, whereas only controlled motivation predicted FMS, in both cases via direct and indirect paths. In addition, direct relations were found between competence and both FMS and PE-related skills, and of peer-relatedness and teacher-relatedness with FMS specifically. Conclusions: Satisfaction of the psychological needs seems important for children's PE-motivation and for their skill development, both directly and indirectly. These results underline the important role that PE-teachers play in constructing a need-satisfying environment. The motivational sequence seems to be more applicable to PE-related skills than to FMS, showing that is important to choose adequate outcome measures when examining PE-motivation.