PurposeThe purposes of the study are to examine the relationships between team emergent states (TES) (i.e. compelling direction, team identity and psychological safety) and team effectiveness outcomes (i.e. team performance, team satisfaction and growth experience), and investigate the mediating role of knowledge sharing and the moderating role of inclusive leadership in those relationships.Design/methodology/approachThis study employed hierarchical multiple regression analysis and bootstrap analyses to test the hypotheses by using data from 73 teams in eight South Korean firms.FindingsPsychological safety was found to be a significant TES for team effectiveness outcomes. Knowledge sharing mediated the relationship between TES and team effectiveness. Lastly, inclusive leadership positively moderated (1) team identity-knowledge sharing; (2) psychological safety-knowledge sharing; and (3) team identity-team performance relationships.Practical implicationsThe authors’ findings suggest that managers cultivate a psychologically safe team climate and show inclusiveness to build successful teams. This study also emphasizes the importance of knowledge sharing to turn positive TES into team effectiveness.Originality/valueFrom a comprehensive perspective, the findings show the detailed mechanism in which TES relate to team effectiveness mediated by knowledge sharing. In particular, the authors' endeavor further determines the different roles of inclusive leadership, as a boundary condition, in the mechanism.