This study investigated the structural relationships among the peer-initiated motivational climate, the fear of failure (FF), and the flow state as perceived by youth soccer players. A total of 347 youth soccer players aged 12–18, registered with the Korea Football Association, participated in the study. Data were analyzed using SPSS 26.0 and Mplus 8.5. Results revealed that the peer-initiated task-involving climate positively predicted the flow state, but was not significantly associated with the FF. In contrast, the ego-involving climate positively predicted both the FF and the flow state, while the FF negatively predicted the flow state. The indirect effect of the task-involving climate on flow state through the FF was non-significant, whereas the ego-involving climate demonstrated a significant negative indirect effect on the flow state, resulting in a suppression effect. These findings highlight the important role of motivational climate initiated by peers in shaping youth athletes’ psychological optimal experiences. Practitioners working with youth players should consider the influence of peers in creating a learning environment, which could reduce the FF and enhance the flow state.
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