Background/Objectives: It is unclear whether adolescent obesity is associated with limited linear growth. We assessed this association in a nationwide sample of adolescents. Methods: We conducted a population-based, study of 2,785,227 Israeli adolescents (60% males) who were examined before military service since 1967 through 2015. Height and weight were measured along with assessment of medical status at age 17.4 ± 0.4 years. The secular trend of height was plotted using United States Center for Disease Control (US CDC) age- and sex-adjusted BMI percentile groups. We accounted for health status at enrollment and computed the expected height based on parental data that was available for 512,978 examinees. Results: Over five decades, the mean height increased by 3.1 cm among males, but remained unchanged among females. Among males, gain in height was attained predominantly during the first 25 years and has stabilized since. Males with obesity were taller than their normal-weight and underweight counterparts. Underweight girls had a prominent increase in mean height during the first two decades, exceeding the mean height of their counterparts with obesity by over 2 cm. There was a gradual decrease in the difference between measured and expected height in males and females regardless of BMI status, with the exception of the underweight females who achieved consistently higher stature than expected (≥3 cm). Conclusions: During five decades, excessive BMI was not a limiting factor in growth potential compared with normal BMI in both sexes. The only group that exceeded its growth potential, when accounting for expected mid-parental height, were underweight females with unimpaired health.