This research attempts to explain how internal team leaders can help teams perform in high stress, dynamic environments. Specifically, the aim of the research was to examine a chain of relationships beginning with team leaders’ core self-evaluations and ending in team performance. Several core research questions were examined, including: “Do leaders’ core self-evaluations and self-efficacy serve as important antecedents of transformational leadership? Is transformational leadership an important antecedent of team efficacy? How does team efficacy lead to higher levels of team performance?” First, I reviewed the extant relevant literature. Second, I derived from this review a theoretical model, which proposes that both leader core self-evaluations and team feedback may influence leader self-efficacy and transformational leadership. Transformational leadership may then influence team efficacy, which in turn may influence performance through its impact on team goals and team action and transition processes. Third, using data collected from a sample of teams composed of first-year MBA students involved in a week-long business simulation, I tested the model and demonstrated support for a number of hypothesized relationships. Fourth, I revised the model based on modification indices provided by covariance structure analysis. I found that leaders’ core self-evaluations do influence their self-efficacy; this efficacy exhibited positive and significant direct relationships with team efficacy and with team processes. In addition, I found support for a chain of relationships linking team efficacy to team goals to team processes to team performance.