Purpose This study aims to test the cross-level effects of team job crafting on individual innovative work behaviour (IWB) and the mediating role of team psychological capital (PsyCap). Design/methodology/approach This longitudinal study tested a multilevel design in a sample of 163 employees, clustered into 45 teams. Job crafting and PsyCap were aggregated to the team level to examine the effects of team job crafting Time 1 on individual IWB Time 2. In addition, mediation analysis was tested to determine whether team-level job crafting Time 1 can affect individual IWB Time 2 through team PsyCap Time 2. Findings Results found that team job crafting was positively related to individual IWB, and the relationship was mediated by team PsyCap. Practical implications This study includes implications for adopting job crafting behaviour at the team level to improve individual IWB. Originality/value This cross-level study is the first to verify the effects of team job crafting on individual IWB and team PsyCap as a mediator. This study extends the literature on job crafting by using a multilevel design in the analysis.