Utilizing cross-functional project teams is an attractive organizing option, particularly in solving complex and innovative problems that require diverse sources of information, knowledge, and expertise brought by individuals from different functional backgrounds. This study is aiming at finding the group dynamics surrounding and inside the teams for the better understand what makes cross-functional project teams effective. Adopting variables from small group research and organizational context research, I extract critical antecedents, mediator, and team-coaching that lead to team performance. Data from 32 cross-functional project teams consisting of 214 individual respondents are analyzed through regression analyses for hypotheses testing. Results of the analyses demonstrate that the team process and team performance are significantly affected by the composition of competence in team and team compensation. Also I find that team-coaching as a leadership behavior has influence on team process and team performance. Some implications, future research directions, and limitations are discussed.