Focusing on hybrid team culture within transnational teams as a facilitator of group interaction, we hypothesized a curvilinear relationship between team heterogeneity on nationality and effective performance. Through a qualitative field study, we developed a mediation model of the effects of transnational team dynamics. Two confirmatory laboratory studies followed. The hypothesized curvilinear relationship was confirmed, with homogeneous and highly heterogeneous teams outperforming moderately heterogeneous ones in the long run. Drawing from conceptual work on status hierarchies, group “faultlines,” and group membership, we discuss implications for team structures in transnational settings.