PurposeThe purpose of this paper is to investigate the process of how paradoxical leadership cultivates subordinates' paradox mindset.Design/methodology/approachThis study used the grounded theory approach. Data collection included semi-structured interviews and observations from eleven top managers and their six subordinates in five Chinese organizations. Managers and their subordinates were asked how they perceived and dealt with tensions in the workplace.FindingsParadoxical leadership promotes subordinates' paradox mindset by helping them learn to face, cope, and live with tensions. First, paradoxical leaders acted as role models for their subordinates and directly influenced followers' attitudes, motivation, and positive psychological states towards tensions. Moreover, when managers help their subordinates reduce stress and anxiety and build confidence, followers learn to cope with tensions. Consequently, subordinates' capacity to live with tensions is increased and they develop the paradox mindset.Practical implicationsThe results imply that reducing subordinates' stress and anxiety and building their confidence can be integrated into work practices and training, which provide insights for managers to cultivate their subordinates' paradox mindset.Originality/valueThis paper investigates how paradoxical leadership impacts and cultivates subordinates' paradox mindset in a tension-setting work environment. The findings not only provide fresh insights into the detailed process of developing employees' paradox mindset but also deepen the understanding of the leader–follower relationship.