Departing from the prevailing focus of the person–environment (P-E) fit literature on individual-level outcomes, we apply the fit concept to the group level and develop a theoretical framework that elaborates the nomological network involving group-level goal fit and ability fit. Specifically, we propose that the positive affect exhibited by leaders and members is a predictor of group-level goal fit and ability fit. We expect two types of group-level fit to predict group performance by shaping intermediate interactive dynamics among members, such as task and relationship conflict. Our analyses based on 96 work teams with 898 members provide empirical support for most of our hypotheses. Of the two group-level fit constructs, only group-level goal fit exerts a significant effect on group performance, which is completely mediated by task and relationship conflict. These theoretical and empirical developments highlight the potential and benefit of the group-level application of the P-E fit theory.