Production teams have become a dominant form of work organization as labor markets have become increasingly diverse. This transition likely affects coworker networks—possibly undermining entrenched patterns of workplace segregation. Contact theory suggests that teams can foster network diversity when workers cooperate and share values emphasizing mutual respect. Yet variants of conflict theory, including the critical teams literature, contend that the benefits of teamwork may be eroded by associated factors, including peer discipline, work intensification, and job insecurity. This study uses 2006 General Social Survey data to assess whether and how teamwork affects the racial diversity of worker acquaintance networks, contrasting worker‐ and manager‐directed teams. We find a positive relationship between teams and diversity, but only when teams are worker directed. Despite countervailing tendencies highlighted in the literature, teams foster greater cooperation between workers, which in turn promotes cross‐racial friendships. African Americans tend to receive the greatest diversity payoffs from teams. These findings suggest that teamwork can undermine segregation, though only with certain implementations and with variation across groups.