Healthcare today is the prerogative of teams rather than of individuals. In acute care domains such as anaesthesia, intensive care, and emergency medicine, the work is complex and fast-paced, and the team members are diverse and interdependent. Three decades of research into the behaviours of high-performing teams provides us with clear guidance on team training, demonstrating positive effects on patient safety and staff wellbeing. Here we consider team performance through the lens of situation awareness. Maintaining situation awareness is an absolute requirement for safe and effective patient management. Situation awareness is a dynamic process of perceiving cues in the environment, understanding what they mean, and predicting how the situation may evolve. In the context of acute clinical care, situation awareness can be improved if the whole team actively contributes to monitoring the environment, processing information, and planning next steps. In this narrative review, we explore the concept of situation awareness at the level of the team, the conditions required to maintain team situation awareness, and the relationship between team situation awareness, shared mental models, and team performance. Our ultimate goal is to help clinicians create the conditions required for high-functioning teams, and ultimately improve the safety of clinical care.