Focusing on the Chinese context, the present study took a pioneering step to examine the relationship between career decision self-efficacy (CDSE) and life satisfaction. Employing a three-dimensional CDSE model, which includes goal planning self-efficacy (GPSE), information gathering self-efficacy (IGSE) and problem solving self-efficacy (PSSE), we also explored the mediation mechanism underlying this relationship from the internal functioning process of CDSE (i.e., the GPSE–PSSE–life satisfaction and IGSE–PSSE–life satisfaction relationships). We then investigated the moderating role of person–environment (P–E) fit in the mediated CDSE–life satisfaction relationship. Data were collected from 786 university students. Results showed that all three dimensions of CDSE were positively related to life satisfaction. The internal process view was supported, for PSSE was found to mediate the relationships of life satisfaction with GPSE and IGSE, respectively. Additionally, P–E fit moderated the relationship between PSSE and life satisfaction. Further examinations also found a significant moderating role of P–E fit in the indirect relationships of life satisfaction with GPSE and IGSE via PSSE.