Researchers in international business have long been interested in understanding the impact of internationalization on firm performance and innovation. However, because international diversification offers both advantages and agency problems, prior studies of this research stream offer mixed results. Based on a sample of Taiwan's publicly listed firms during the period of 2000—2009, this study contributes to this research stream by examining the impact of family management on firm performance and innovation implications of internationalization. This study finds that family management positively moderates the relation between internationalization and performance/innovation. These findings suggest that family management helps mitigate the agency problems associated with internationalization so that family firms experience positive benefits from internationalization in terms of innovation and performance.