<p>Leader unethical pro-organizational behavior (UPB) can cause unethical repercussions among employees that could eventually turn into work team unethical climates. While scholars have broadly examined the beneficial aspect of UPB, the unethical behavioral mechanism underlying it – which can be extracted by team members and affect the overall team climate – has been largely overlooked. Grounded in social cognitive theory, this study explores how employees extract the unethical behavioural mechanism underlying leader UPB and form cognitive interpretation that extend beyond their leader’s original behaviour, thereby contributing to the emergence of an overall work team unethical climate. This study also assesses whether employees’ ethical values help attenuate the transmission of the unethical effects of leader UPB. Using multi-wave, multisource data from 165 team leaders and their 495 employees in manufacturing organizations in a Pakistani industrial city, this study conducted structural equation modelling to test the hypotheses. The results support present proposed multilevel top-down and bottom-up associations. Specifically, results show that employees extract unethical behavioral principles from leader UPB and develop broader moral disengagement, which in turn fosters a team-level unethical climate, particularly when employees overlook their ethical values. Theoretical and practical implications of these findings are discussed.</p>