How team composition exactly influences innovation outcomes remains a complex and unsolved puzzle in the literature on creativity and innovation. Our study differentiates two types of team technology-related diversity—technological dissimilarity and technological variety, and investigates their influences on the impact of an invention created by a team. Analyses of over half million U.S. utility patents in the 1991–2005 period invented by teams reveal that technological variety of team inventors has a positive effect on invention impact, and that technological dissimilarity between team inventors plays both positive and negative roles, eliciting an inverted U-shaped effect. In addition, we find that the positive effect of dissimilarity is significantly reduced after controlling for variety. Theoretical and practical implications of our findings are discussed.