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Successful teams tend to be highly cohesive and team cohesion to be particularly helpful in allowing teams and their members to sustain their success even in the most challenging times. One disillusioning consequence of this reciprocity between cohesion and performance would suggest that failures made by teams and/or their members likely jeopardize their success by preventing them from capitalizing on such virtuous circles associated with team cohesion. Yet, many teams uphold their performance despite the failures they have to cope with, suggesting that the potential vicious circles can be overcome. This chapter aims at illuminating the vicious and virtuous circles associated with team cohesion that are induced by either collective failures of teams or individual failures of their members. It therefore offers a multilevel perspective not only on the emergence and diffusion of failures at the individual and team levels, but also on the critical role that team cohesion plays for a team’s (dys)functional coping across these levels. It is theorized that collective failures triggered exogenously can help build team cohesion, and that whether endogenously-triggered collective failures bring about the vicious or the virtuous circles of team cohesion depends on whether the individual failures developing into collective failures are triggered endogenously or exogenously. The implications of this conceptual work are discussed in light of the literatures on error/failure management and group cohesiveness.