Despite the surge of interest in the effects of team leader coaching behaviours, theoretical understanding regarding how and when team leader coaching influences team outcomes remains notably sparse. We address this gap by building on team coaching theory (Hackman & Wageman, 2005) and social information processing theory (Salancik & Pfeffer, 1979) and propose that team leader coaching behaviours will facilitate a climate for innovation (H1) and that this relationship is moderated by team task interdependence (H2), leading to team innovation (H3). Our multilevel SEM analysis of 136 hospital teams in the English NHS (732 participants) show a non-significant relationship between team leader coaching behaviours and team climate for innovation but reveal a positive moderation effect such that team leader coaching had a significant positive effect on team climate for innovation when team task interdependence was high, leading to team innovation (H3). Our findings contribute to the team coaching literature by testing a moderated mediation model explaining how and when team leader coaching leads to crucial team outcomes. Theoretical and practical implications are discussed.