With the recent experiences involving COVID-19, there is a growing need for organisations to better understand compassion in addressing employees’ suffering and boosting their well-being. Particularly, as teamwork is becoming ubiquitous, organisational scholars have identified positive benefits of compassion at the team level such as improving communication, decreasing interpersonal conflicts and boosting team effectiveness. Using a multilevel theoretical framework in reviewing compassion research, this article advances our understanding of team-level compassion by elucidating the processes through which individual-level compassion gives rise to team-level compassion. First, we delineate composition and compilation models of the emergence of team compassion and review empirical studies with respect to the two models. Second, we explain three social mechanisms in teams – social learning, emotional contagion and reciprocity – that shape the emergence of team compassion. Finally, we discuss interventions that can facilitate the emergence of team compassion and offer practical guidance for managers seeking to foster team compassion. JEL Classification: D23, I31