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Our study provides new theoretical insights into the integration of social identity and social exchange theory through an examination of the effects of leader-member subgroup similarity, perceived leader-member exchange, faultlines and social identity leadership. Empirical support was found from 430 team members nested within 73 teams across four organizations for the mediating effect of perceived leader-member exchange on the relationship between leader-member subgroup similarity and perceived team identification, within the relationship between leader-member subgroup similarity and perceived leader-member exchange being moderated by faultlines. In addition, the relationship between perceived leader-member exchange and perceived team identification is enhanced by higher levels of social identity leadership. Overall, the findings contribute to our understanding of the relationship between different identity orientations and perceived leader-member exchange. This understanding has implications for the effective management of leader–member relationships.

Leader-member subgroup similarity and team identification: effects of faultlines, social identity leadership and leader-member exchange