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Summary Decades of research on leader–member exchange (LMX), which refers to relationship quality between a leader and follower, has consistently shown LMX to be positively related to individual outcomes. An emerging body of research exploring whether these positive results extend to the team level has found inconsistent results. Because team LMX relationships with team outcomes are not consistent, we explore the way in which peers can contribute toward team outcomes and also enhance the relationship between team LMX and outcomes. Specifically, we investigate the role that peer mentoring social networks play in providing advice and support to team members to enhance what is provided by the leader. With a sample of 111 teams from 25 diverse organizations, results revealed that peer mentoring is positively and indirectly related to supervisor‐assessed team performance via team potency. In addition, peer mentoring moderated relationships between team LMX (operationalized as LMX median) and team performance and team potency such that these relationships were more positive when the density of the peer mentoring was high rather than low. Our study contributes to the LMX, team, and mentoring literatures by highlighting the effects of within‐team peer mentoring on team performance.

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