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Bringing new products to market requires team effort. New product development teams often face demanding schedules and high deliverable expectations, making time pressure a common experience at the workplace. Past literature have generally associated the relationship between time pressure and performance based on the inverted-U model, where low and high levels of time pressure are related to poor performance. However, teams do not necessarily perform worse when the levels of time pressure are high. In contrast, there are numerous examples of high-performance teams in intense time-pressure situations. The purpose of this study is to reconcile some of the discrepancies concerning the effects of time pressure by considering the nature of stress. This study is also designed to investigate time pressure at team level-an area that is not well investigated. A model of 2-D time pressure, i.e., challenge and hindrance time pressure, was developed. Data are collected based on a two-part electronic survey from 81 new product development teams (500 respondents) in Western Europe. The results showed challenge and hindrance time pressure to improve and deteriorate team performance, respectively. At the same time, we also found team coordination to partially mediate the time-pressure-team-performance relationships. Furthermore, team identification is found to sustain team coordination, especially for teams facing hindrance time pressure. This indicates that teams that possess strong team identification could be positioned strategically in projects where time pressure is intense and where the stakes are high. Other implications with respect to theory and practice are discussed.