ABSTRACT Based on conservation of resources theory and social information processing theory, the paper explores how workplace suspicion behaviors by suspicious perceivers initiate subsequent knowledge hiding via psychological distress and under the cross-level moderation of team performance climate and mastery climate. This research collected multi-wave 552 valid employee questionnaires nested in 83 teams from service sector companies located in the central and eastern China. We analyzed data using multi-level analysis based on hierarchical linear modelling. Results showed that workplace suspicion is positively related to knowledge hiding, whereas psychological distress plays a mediating role in the relationship. Moreover, performance climate positively moderates the accelerating effect of workplace suspicion and psychological distress on knowledge hiding, while mastery climate negatively moderates the accelerating effect of workplace suspicion and psychological distress on knowledge hiding. The research contributes to examining the relationship between workplace suspicion and knowledge hiding in service organizations from the “actor-centric” perspective. Furthermore, the study provides a first step to reveal the “black box” of the impact of workplace suspicion on knowledge hiding and clarify the boundary conditions for the influence of workplace suspicion and psychological distress on knowledge hiding.