This study investigates the impact of product modularity on product development performance in the context of team processes. Although previous studies have argued that product development performance increases with product modularity, owing to the enhancement of problem solving in product development, few have empirically demonstrated the relationship. In addition, previous studies remain silent regarding the mechanism by which product modularity moderates the effects of team processes on performance during product development. We examine product modularity's direct effects on product development performance and moderating effects on team members' communication and effort. Using survey data of 48 project leaders in a Japanese system integration company, we found that the modularity of an information system enhanced the effectiveness and efficiency of its development. Furthermore, the positive impact of communication within team members was attenuated by product modularity. This study broadens our understanding of product modularity and team processes.