Water
Water play is fun for the kids, especially during the hot summer months. If you don't have a pool, even an inflatable one, you could always use the hose. Let the kids take turns trying to "hit" each other with water. And don't forget water balloons! You could toss them or divide into teams and try to hit the opposing players. Young children enjoy water tables with appropriate water toys.
More Kid Ideas
Kids love sand. You can make your own sandbox by purchasing an inexpensive and deep plastic storage box and a few bags of sand. Or pick a spot in your yard and build a more permanent one. Give your kids a list and send them on a scavenger hunt. The list can have trees and flowers for them to find or you can hide items in the yard, like their favorite toy truck. Wheelbarrow races, running races and obstacle courses are more activate fun and can be effective if you're looking to tire out the kids.
Games for Everyone
One or two lanes of backyard bowling can be set up and played by folks of any age. You can use soda cans, water bottles or stuffed animals as pins. Try a softball or a soccer ball for the ball. Baseball, soccer and football are organized sports you could play with a mixture of older kids and adults. If you have the nets, badminton or volleyball games would also be fun.