Firms increasingly equip field service workers with virtual team technology that enables them to deliver services more efficiently and take part in new service development. However, the "out-of-office" nature of field service tasks limits the possibilities for supervision, so virtual team outcomes are hard to control. To predict virtual team service performance, this study delineates the notion of team efficacy in the context of virtual service teams. The authors assess virtual team members’ perceptions of virtual team efficacy and its perceived antecedents and consequences. The authors find that perceived virtual team efficacy explains service performance better than previously established, generalized confidence beliefs. Specifically, data collected from 192 field service employees in 28 virtual teams reveal that perceived virtual team efficacy provides a strong predictor of in-role service performance and extra-role innovative service performance. Factors external to the organization (i.e., competitors’ use and customer appreciation of virtual team technology) drive perceived virtual team efficacy, whereas internal factors (i.e., supervisor and peer encouragement of virtual team technology) are less effective. Therefore, managers must keep up-to-date with competitive developments and openly discuss insights with the team. Positive customer feedback should also be distributed to team members when employee contributions to new service development are envisioned.