This study investigates the impact of group demography on the performance of new product teams in high-technology companies. Using data from 409 individuals across 45 new product teams, the research finds that both functional and tenure diversity influence team performance through their effects on internal processes and external communication. Functional diversity enhances external communication, which in turn improves managerial ratings of innovation and overall performance. Tenure diversity affects internal processes, which influence team ratings of performance. However, diversity can also directly hinder performance. The study highlights the complex relationship between group demography and performance, emphasizing the role of internal processes and external communication. It shows that demographic variables influence performance both directly and indirectly. For example, functional diversity is positively related to external communication, which is linked to innovation and overall performance, but also has a direct negative impact on performance. Tenure diversity is associated with internal processes, which influence team performance, but also has a direct negative effect on performance. The study also examines the effects of group size, resource availability, and the nature of the product being developed. It finds that group size is positively related to functional diversity but not to tenure homogeneity or performance. Resource availability and the revolutionary nature of the product are also considered, but they do not show strong relationships with performance. The study uses path analysis to decompose the relationship between demography and performance, finding that demographic variables have both direct and indirect effects on performance. The results show that while diversity can enhance communication and innovation, it can also lead to lower performance ratings. The study concludes that understanding the complex interactions between group demography, internal processes, and external communication is crucial for improving team performance in new product development.This study investigates the impact of group demography on the performance of new product teams in high-technology companies. Using data from 409 individuals across 45 new product teams, the research finds that both functional and tenure diversity influence team performance through their effects on internal processes and external communication. Functional diversity enhances external communication, which in turn improves managerial ratings of innovation and overall performance. Tenure diversity affects internal processes, which influence team ratings of performance. However, diversity can also directly hinder performance. The study highlights the complex relationship between group demography and performance, emphasizing the role of internal processes and external communication. It shows that demographic variables influence performance both directly and indirectly. For example, functional diversity is positively related to external communication, which is linked to innovation and overall performance, but also has a direct negative impact on performance. Tenure diversity is associated with internal processes, which influence team performance, but also has a direct negative effect on performance. The study also examines the effects of group size, resource availability, and the nature of the product being developed. It finds that group size is positively related to functional diversity but not to tenure homogeneity or performance. Resource availability and the revolutionary nature of the product are also considered, but they do not show strong relationships with performance. The study uses path analysis to decompose the relationship between demography and performance, finding that demographic variables have both direct and indirect effects on performance. The results show that while diversity can enhance communication and innovation, it can also lead to lower performance ratings. The study concludes that understanding the complex interactions between group demography, internal processes, and external communication is crucial for improving team performance in new product development.