BACKGROUND/OBJECTIVES: The importance of teams for improving quality of care has received increased attention. We examine both the correlates of self-assessed or perceived team effectiveness and its consequences for actually making changes to improve care for people with chronic illness. STUDY SETTING AND METHODS: Data were obtained from 40 teams participating in the national evaluation of the Improving Chronic Illness Care Program. Based on current theory and literature, measures were derived of organizational culture, a focus on patient satisfaction, presence of a team champion, team composition, perceived team effectiveness, and the actual number and depth of changes made to improve chronic illness care. RESULTS: A focus on patient satisfaction, the presence of a team champion, and the involvement of the physicians on the team were each consistently and positively associated with greater perceived team effectiveness. Maintaining a balance among culture values of participation, achievement, openness to innovation, and adherence to rules and accountability also appeared to be important. Perceived team effectiveness, in turn, was consistently associated with both a greater number and depth of changes made to improve chronic illness care. The variables examined explain between 24 and 40% of the variance in different dimensions of perceived team effectiveness; between 13% and 26% in number of changes made; and between 20% and 42% in depth of changes made. Conclusions: The data suggest the importance of developing effective teams for improving the quality of care for patients with chronic illness.