The purpose of this study was to investigate the relationships of the project manager’s leadership style with team interaction, and their impact on project performance. The second objective was to determine whether the effect of leadership style on project performance may be mediated by team interaction. To address the primary aims, a questionnaire-based survey was used to measure the project manager’s leadership style, team communication and collaboration, and overall performance of research and development (R&D) projects in the Taiwanese server industry. The analyses suggest that transformational leadership may be positively related to team communication and collaboration. Additionally, levels of team communication and collaboration are positively associated with projects’ levels of performance. The results also indicate that team communication and collaboration may serve as mediators between transformational leadership and project performance.