Maham SaeedFA22-RPM-004Dr. Ghulam Hussain2026-04-142024https://repository.cuilahore.edu.pk/123456789/3499The rapid evolution of IT sectors requires effective and smart project management methodologies to get better project performance. This study explores the interesting interplay between agile practices and project performance while considering the combined effect of team psychological empowerment, team cohesion, and team size. Agile methodologies have revolutionized the IT sector in terms of performance because of their flexible, iterative, and customer-centric nature. However, making teams psychologically empowered by giving them a sense of autonomy, competence, meaningfulness, and impact boosts the results of agile practice for improved project performance. We conducted this study by extensively gathering data from 250 project managers working in Agile-based organizations by using online survey forms. After that, we used structural equation modeling to test our proposed hypotheses. Our analysis revealed that agile practices significantly enhance project performance by fostering team psychological empowerment and team cohesion within smaller teams. This study also highlights the importance of optimal team size for greater impact. This study provides a roadmap for project managers to understand the team dynamics and, the combined effect of team psychological empowerment and team cohesion to get the best team performance and improved project performance. Our research provided a new layer of understanding of the complex interplay between our variables and offers actionable insights for the IT industryen-USExploring the Interaction Effect of Agile PracticesTeam Psychological Empowerment on Project Performance in the IT SectorThesis