This study examines the relationship between software project team characteristics and team performance by focusing on two questions: whether or not different team characteristics in software project team affect project performance, and whether or not different types of team motivation lead to different level of influence to the relationship between team characteristics and performance? In this study, we argue that team motivation should be considered as a moderate between the relationship of team characteristics and performance. Different kind and level of team motivation can result in different project performance outcome. We examine the interaction effects between team characteristics and team motivation before their final impact to the performance. The results show that the relationship between project team characteristics and performance can be interfered with team motivation. Management should pay more attention to team motivation within project teams so that a better project performance could be achieved.