Taking a social relations approach to team diversity, we propose that faultlines-hypothetical dividing lines that split a team into relatively homogeneous subgroups-impact the team members' propensity to exhibit social loafing behaviour. We further propose that this individual-level reaction to the faultline structure of the team can differ among team members, depending on the size of their subgroup and on their individual social competence. We tested the assumptions with a sample of real teams working on an intellective task during which social loafing behaviour was video-coded. In partial support of the hypotheses, generalized mixed models revealed that social loafing behaviour was most common for team members who were part of a team with strong faultlines, who belonged to the larger subgroup in their team, and who exhibited low levels of social competence. The results therefore highlight the benefits of taking a multilevel approach to the effects of faultlines.