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The relationship between team diversity and new product performance is often assumed to be linear. This assumption has been challenged conceptually and empirically, but results to date have been inconsistent. This study examines this issue based on behavioral theory and social identity theory. The empirical results generally supported our expectations of the inverse U-shaped relationship between team diversity and new product performance. We also hypothesized and found that organizational slack moderated the curvilinear relationship between team diversity and new product performance. A questionnaire survey on 118 new product development projects in Taiwanese firms is collected to test the hypotheses. We conclude by discussing the managerial implications of these findings for the use of team composition to the new product projects in personnel selection. [ABSTRACT FROM PUBLISHER]