Interpersonal emotion regulation is an important psychological function in social behavior. However, this construct has still been scantly explored in work psychology and organizational settings, meaning that the effects of interpersonal emotion regulation on core aspects of work performance are as yet unknown. In order to address this omission, our article seeks to provide insight into how, in the context of teamwork in organizations, leaders can enhance team effectiveness by using interpersonal emotion regulation to capitalize on the important role that affect plays in team innovation. Using a multisource field study, we tested and supported a model in which leaders’ attempts to improve their team members’ emotions were positively related to team innovation via team positive affective tone. Conversely, leader affect-worsening regulation was negatively related to team innovation via team negative affective tone. Our findings indicate that interpersonal regulation of emotions within teams matters for shared affect and team performance and informs practitioners that assessing and training leaders in interpersonal emotion regulation could benefit team effectiveness.