An extensive body of literature indicates the importance of teamwork to the success of innovative projects. This growing awareness, that “good teamwork” increases the success of innovative projects, raises new questions: What is teamwork, and how can it be measured? Why and how is teamwork related to the success of innovative projects? How strong is the relationship between teamwork and various measures of project success such as performance or team member satisfaction? This article develops a comprehensive concept of the collaboration in teams, called Teamwork Quality (TWQ). The six facets of the TWQ construct, i.e., communication, coordination, balance of member contributions, mutual support, effort, and cohesion, are specified. Hypotheses regarding the relationship between TWQ and project success are tested using data from 575 team members, team leaders, and managers of 145 German software teams. The results of the structural equation models estimated show that TWQ (as rated by team members) is significantly associated with team performance as rated by team members, team leaders, and team-external managers. However, the magnitude of the relationship between TWQ and team performance varies by the perspective of the performance rater, i.e., manager vs. team leader vs. team members. Furthermore, TWQ shows a strong association with team members’ personal success (i.e., work satisfaction and learning).