Purpose Drawing on the equity theory and self-categorization theory, the authors examine the congruence effect of perceived self-overqualification and perceived coworker-overqualification on team–member exchange (TMX) quality, which in turn influences employees' organizational identification. Design/methodology/approach The data were collected from 392 employees in 78 teams at 2 time points, and polynomial regressions was used to test the hypothesized associations. Findings The more consistent perceived self-overqualification is with perceived coworker-overqualification, the higher quality of TMX. Moreover, TMX mediates the relationship between this congruence on organizational identification, which indicates that the congruence of perceived overqualification is related to higher-quality TMX, and then makes overqualified employees produce higher levels of organizational identification. Originality/value The findings of the research contributes to theory building of perceived overqualification through distinguishing perceived overqualification as an individual characteristic from the perception of overqualification that occurs in teams. Besides, by analyzing employees' experiences of overqualification in the context of their colleague-group, this study demonstrates the importance of considering overqualified individuals' social context (e.g. the composition of teams) in exploring the consequences of perceived overqualification. Theoretical and practical implications are discussed.