As artificial intelligence (AI) is being increasingly used in the workplace to automate employees’ job tasks, organizational scholars have started to investigate how employees react to such AI-enhanced task automation but have generally found contrasting findings. To better understand this issue, we draw upon technology affordances and constraints theory (TACT) and research on psychological ownership to investigate the effect of such task automation on employees’ psychological reactions and in-role performance in the team context. Through testing multi-source and multi-wave data collected from 377 work teams, we found that AI-enhanced task automation can have dual effects on team members’ job-based psychological ownership feelings and in-role performance through automation adaptation (i.e., the affordance actualization process) and automation intrusion (i.e., the constraining aspect of affordances). We also found that team task reflexivity can strengthen the desirable effect of AI-enhanced task automation. Our contributions to research on employee reactions to AI use, TACT, and psychological ownership are discussed at the end.