This study aimed to explore a social-contextual view of talent development in sports by which the demographic and contextual factors of engagement, psychosocial development, and satisfaction, and the extent of their relationships, may be investigated concurrently. The sample (n = 257, nfemale = 122, and nmale = 135) consists of youth athletes (mean age = 17.87 and standard deviation = 1.10), and cross-sectional survey data from two randomly selected sports academies in Ethiopia. Analyses involve group comparisons to identify differences and multiple regressions to examine predictions. Group comparison results show that enrollment in a sports academy accounted for a significant difference in youth athletes’ measured engagement. Moreover, results of regression analyses indicate that higher psychosocial development and more satisfaction of youth athletes were associated with higher engagement and some demographic and contextual factors. Results also show that higher engagement of youth athletes was associated with some demographic and contextual factors. The group comparison results support the self-determination theory, providing evidence regarding the importance of social-contextual conditions in determining the engagement of youth athletes. The results of multiple regression analyses validate engagement theory and substantiate the results of previous studies on talent development. Specifically, it may be inferred that youth athletes’ engagement is not only one of the results of participation in sports but also one of the processes contributing to higher levels of reported psychosocial development and satisfaction. The implications of these results for theory and practice are discussed.