Purpose -The purpose of this paper is to explore how newly formed culturally diverse project teams develop and implement rules, and how these processes may be affected by language-fluency asymmetries. Design/methodology/approach -Using a case-study research design, the authors investigated three multicultural project teams within a management integration program in a multinational company in France. Their complete data set includes 37.5 hours of observations and 49 hours of semi-structured interviews. Findings -Findings revealed that subgroups formed on the basis of language-fluency and this affected the development and implementation of rules. While rule-setting mechanisms emerged across teams, they varied in form. On the one hand, tightly structured rules emerged and rules were rigidly applied when there were greater language inequalities. In contrast, implicit behavior controls guided interactions when language-fluency subgroupings were less salient. The findings also revealed that the alignment of other individual attributes with language fluency reinforced subgroup divisions, further impacting the rule development and implementation processes.Practical implications -Understanding rule development and implementation in culturally diverse teams and how these processes are impacted by language disparities enables managers to help members develop more successful behavioral patterns by keeping language-fluency (and other) attributes in mind.Originality/value -The study extends and complements previous team research by providing in-depth insights into the process of rule development and implementation. It demonstrates the impact of languagefluency asymmetries and subgroup dynamics on these processes. The authors propose a model to capture the processes by which culturally diverse teams create rules, and how the rule-setting mechanisms might be moderated by faultlines such as language-based disparities.