A burgeoning body of research shows that faultlines (hypothetical dividing lines that split a group into subgroups; Lau and Murnighan 1998) influence critical performance outcomes for groups and organizations (e.g., Thatcher and Patel 2011, 2012). Despite our growing understanding of faultlines, when it comes to understanding how faultlines influence group performance, results are inconclusive. While the majority of studies show a negative relationship between faultline strength and performance, some studies suggest that this may not be universally true - the relationship may be non-significant or even positive (e.g., Cooper et al. 2014, Lau and Murnighan 2005). We suggest that this is because research on faultlines has been dominated by a focus on demographic faultlines, assumed to remain constant over time. Addressing these inconsistencies, we draw on the identity and group development literatures to argue that as a group’s context evolves over time, individual identity motives become salient, which in turn activate different types of group faultlines (demography-, information-, and execution-based faultlines). Our conceptual framework is based on eight group faultline profiles that explicate how combinations of activated faultline types and strength accrue throughout a group’s development stages to affect group performance. Our theory thus explains how faultlines can influence group performance in both negative and positive ways.