The impact of lean production on psychological health was assessed by comparing lean production teams in garment manufacture with a traditional system for making similar garments. Work design characteristics were examined as mediators of the impact of work organization on health. Findings indicate both positive and negative direct effects of teamworking on aspects of autonomy, work demands, and social climate. In turn, both positive and negative direct effects of work design on psychological health were found, which combine to give no overall difference between the groups. This study suggests that the balance between positive and negative effects of lean production teamworking depends on management choices in the form of work design.