This study proposes and tests a model that explains the mediating mechanism through which the transactive memory system (TMS) of a team impacts on team performance under varying levels of team geographic dispersion. The model proposes that the relationship between TMS and team performance is mediated by the extent of knowledge integration among team members. The model further proposes that the degree of team geographic dispersion moderates the effect of TMS and knowledge integration on team performance. Survey data from 54 project teams in a major telecommunication company were collected to test the model. The study develops a deeper understanding of the mechanism through which TMS affects team performance and highlights the need to explicitly theorize team geographic dispersion, an important characteristic of contemporary project teams, in TMS research.