As the workplace has become increasingly diverse, there has been a tension between the promise and the reality of diversity in team process and performance. This article explores diversity through three primary theoretical perspectives: the similarity-attraction paradigm, self and social categorization, and information processing. The similarity-attraction paradigm was developed to understand dyadic relationships. The self-categorization/social-identity and similarity-attraction approaches both tend to lead to the pessimistic view of diversity in teams. The information-processing approach, by contrast, offers a more optimistic view: that diversity creates an atmosphere for enhancing group performance. The article ends with suggestions for how organizations can learn to create incentives for change within the firm.