In today’s dynamic and hypercompetitive business environment, individual innovation behavior has become the foundation and source of organizational innovation, and it has an important influence on organizational performance and core competency of enterprises. So “how to stimulate employees’ innovative behavior” has become one of the hottest topics of organizational behavior and innovation management at present. Research shows that team psychological safety plays a significant role in members’ innovative behavior. However, past studies in this domain primarily focused on the positive aspects of leaders’ characteristics and behaviors. Past researches on the mechanism of the team psychological safety to members’ innovative behavior have been carried out, and they were explored mainly from a single horizontal level (individual level), rarely using cross-level research design and hierarchical linear model statistical methods to investigate the impact of team characteristics and individual-level factors on members’ innovative behavior. Also the mechanism and process by which team psychological safety exert its impact have not been adequately explored in the existing literature. In this study, we try to examine the influence of team psychological safety on members’ innovative behavior, and investigate the mediating role of knowledge sharing in the context of Chinese organizations. A structured questionnaire was employed as the research instrument for this study. It consists of three scales designed to measure the variables of interest, namely team psychological safety, knowledge sharing and members’ innovative behavior. Data were collected from 65 work teams comprising 387 members who came from high-tech enterprises located in the Pearl River Delta area. Cronbach’s alpha coefficients for the above measures are from 0.803 to 0.874, showing good measurement reliability. Data aggregation test shows that the organizational level data collected from the individual data aggregation is appropriate. Hierarchical linear model (HLM) was applied to analyze the survey data for testing the hypotheses proposed. With the demographic variables controlled, such as, gender, educational level, work experience and tenure, empirical results reveal that team psychological safety is positively related to knowledge sharing and members’ innovative behavior, knowledge sharing is positively related to members’ innovative behavior, and knowledge sharing is a cross-level mediator between team psychological safety and members’ innovative behavior. Our findings reveal that both team psychological safety and knowledge sharing are positively associated with members’ innovative behavior. The result suggests that knowledge sharing is a key element for promoting members’ innovative behavior. These findings make us understand better the mechanism of action which team psychological safety acts on members’ innovative behavior. Entrepreneurs can do everything possible to improve team psychological safety and knowledge sharing to enhance members’ innovative behavior and organizational innovative performance. At the end of the paper, the theoretical and managerial implications of the findings, limitations, and future research directions are discussed.