Purpose: We aimed to determine the effects of a classmate-supported, supervised, in-hospital physical activity program during treatment primarily on cardiorespiratory fitness and secondarily on physical function. Methods: A multicenter non-randomized controlled intervention study including children diagnosed with cancer, 6–18 years at diagnosis treated with chemo-/radiotherapy. The intervention comprised (i) an educational session on cancer in the child’s school class; (ii) selection of two “ambassadors”—classmates who were co-admitted, supporting the child’s everyday hospital life; and (iii) supervised in-hospital physical activity from diagnosis and throughout intensive treatment. One-year post-treatment, physical testing included cardiorespiratory fitness (primary outcome), Sit-to-Stand test, Timed-Up-and-Go, and Handgrip Strength. Results: The intervention group included 75 of 120 children (61% boys, 13.4 ± 3.1 years); the control groups included 33 of 58 children with cancer (58% boys, 13.5 ± 2.5 years), and 94 age- and sex-matched children without a cancer history. One-year post-treatment, cardiorespiratory fitness tended to be higher in the intervention group (37.0 ± 6.0 mL/kg/min) than in the patient control group with cancer (32.3 ± 9.7 mL/kg/min) (mean difference 4.7 [0.4 to 9.1], p = 0.034). The intervention group performed better in the secondary outcomes. Compared with community controls, both patient groups had lower cardiorespiratory fitness. The patient control group had lower Sit-to-Stand, Timed Up and Go, and Handgrip Strength, while the intervention group had strength comparable to that of the community controls. Conclusions: Peer-supported, supervised, in-hospital physical activity during treatment may improve cardiorespiratory fitness and muscle strength 1-year post-treatment in children with cancer; however, survivors continue to have lower cardiorespiratory fitness than community controls. Implications for Cancer Survivors: Children with cancer may benefit from in-hospital physical activity in improving long-term cardiorespiratory fitness and muscle strength.