Goal-setting is a widely used and accepted strategy for promoting physical activity. Locke and Latham’s goal-setting theory is the primary theoretical framework for setting goals in psychology and plays a prominent role in physical activity promotion. Recently, however, there have been calls to reconsider current goal-setting practice in this field. Therefore, we aimed to critically review and update the application of goal-setting theory in physical activity promotion, by examining core developments in this theory since 1990. Current practice relies on setting specific ‘performance’ goals as a means of increasing physical activity (e.g., 10,000 steps; national physical activity guidelines). This approach was initially consistent with key tenets of goal-setting theory. However, since 1990 this theory has evolved to differentiate between performance and learning goals. Both goal types are context-dependent and it is now recognised that, in some cases, performance goals can even be detrimental to the achievement of desired outcomes. Consequently, current practice may be theoretically appropriate for physically active individuals but a different approach (e.g., learning goals) may be preferable for inactive individuals who are new to physical activity (i.e., most of the population). We conclude by discussing implications for policy, research, and practice in goal-setting for physical activity promotion.