Research on the effects of cultural diversity on individual team member performance has typically assumed a linear relationship, but has yielded mixed findings. In the study, we address these inconsistencies by hypothesizing an optimal (mid-range) level of diversity that maximizes performance. Given the potential for negative emotions to arise within a diverse team, we also hypothesize that team members who employ emotional self-regulation strategies will demonstrate stronger performance. We adopt an individual-level perspective, assessing diversity as the cultural dissimilarity between each individual and their teammates. Using a sample of 103 postgraduate students (23 teams with 3–6 participants in each), we found evidence of a curvilinear relationship between cultural dissimilarity and individual team member performance. Contrary to our expectations, we found that individual performance is greatest at very low and very high levels of dissimilarity. In terms of emotional regulation strategies, we found that cognitive reappraisal was associated with higher performance, but there was no evidence for the effects of expressive suppression. Together, the present findings challenge the assumption that the diversity-performance relationship is linear. Our findings also indicate individual performance in culturally diverse teams is influenced by individuals’ use of cognitive reappraisal to regulate negative emotions.