Larson accepted an athletic scholarship to attend the University of Florida in Gainesville, Florida, where he swam for the Florida Gators swimming and diving team in National Collegiate Athletic Association (NCAA) competition under coach Randy Reese from 1978 to 1981. Larson won two NCAA championships at Florida in the 800-yard freestyle relay (1979, 1981), and setting American and NCAA records. He finished second in the 200-yard freestyle to Rowdy Gaines of Auburn in 1981, but then out-swam Gaines on the final leg of the 800-yard freestyle relay to claim the NCAA championship in the relay. Larson earned twenty-one All-American honors and was national record holder in the 400-yard freestyle relay.
Larson was selected for the 1980 U.S. Olympic Team, but was unable to compete because U.S. PresidentJimmy Carter organized the boycott of the Moscow Olympics in protest of the Soviet invasion of Afghanistan. Larson was a favorite to win several medals in 1980. Larson was a member of the 1984 U.S. Olympic Team that competed in Los Angeles, California and won a gold medal in the men's 800-meter freestyle relay team, beating the favored West German team, anchored by Michael Gross, and setting a new world record for the event (7:15.69). Larson was also named to several other U.S. National Swim Teams, representing the United States in international competition.