While the importance of communication frequency to transactive memory system (TMS) development has well been established, few studies have been done examining the relationship between communication quality and transactive memory systems in software development teams. This study empirically tests the relationships between communication quality and TMS, and the effect of TMS on team effectiveness. We also examine the mediating effect of trust on the link between communication quality and TMS. By investigating 86 software development teams in China, the results suggest that: (1) communication quality has a positive effect on TMS; (2) the link between communication quality and TMS is mediated by benevolence‐ and competence‐based trust; and (3) TMS has a positive impact on team performance. Theoretical and managerial implications of the study findings are discussed.