We open the black box of corporate innovation production by examining its most important input: the employees tasked with creating new inventions. Using a novel within-firm research design involving the universe of U.S. corporate inventors across four decades, we find that inventors’ shared cultural values are a critical driver of inventor team formation. Moreover, using premature co-inventor deaths as exogenous shocks to team composition, we document both positive and negative impacts of inventor team cultural diversity on team patent production. Less culturally diverse teams produce a higher overall quantity of patents that tend to exploit existing technologies, while more culturally diverse teams produce more risky, exploratory patents with a greater potential for high-impact innovations. Exploring the underlying mechanisms, we present evidence that culturally diverse teams tend to seek new knowledge from more heterogeneous and non-traditional input information sources, but they also face greater knowledge integration challenges. Overall, our results present a more nuanced perspective on diversity, revealing that it does not lead to uniformly better or worse outcomes, but instead impacts the type of R&D output.