This study investigates how the transactive memory system (TMS) and geographic dispersion (GD) of an IT project team may impact how an individual member utilizes his or her expertise dissimilarity to stimulate creativity. A cross-level analysis of data from 141 team members and their supervisors in thirty-five IT service project teams revealed that there is a significant three-way interaction between an individual’s expertise dissimilarity, GD, and TMS on individual creativity. Specifically, TMS is important to all teams, but it is particularly essential to low-GD teams: without the support of a well- developed TMS, individual members who possess highly dissimilar expertise to their peer team members are significantly more disadvantaged in terms of creativity when working in a collocated context than in a dispersed context. Our research mainly contributes to a differentiated understanding of (1) GD as a double-edged sword that creates both restraining but also facilitating effects on the individual team member’s creativity and of (2) TMS as a vital team capability that helps overcome the obstacles that expertise-dissimilar employees might face in their pursuit of creativity. These findings highlight the importance of developing a cross-level perspective of TMS and incorporating the GD factor to enrich the current research.