Most studies find that a firm’s EO is significantly and positively related to its performance. Previous research finds that EO can be best conceptualized as a second-order factor consisting of three distinguishable yet related first-order factors: risk taking, innovativeness and proactiveness.Furthermore, many studies have identified internal and environmental moderators of the EO-performance relation, and Rauch et al. (2009, p. 781) suggest that “it is time to open up EO research to new ideas and to further examine the role of moderators”. This paper aims to do exactly that; but, unlike existing studies that look outside of the dimensions of EO for moderating variables, we examine mediating and moderating relations between the dimensions of EO. Our approach is in line with entrepreneurship research that emphasizes the importance of optimally combining various factors to create a competitive advantage, rather than simply identifying factors that affect performance. Our results contribute to understanding why EO is related to firm performance.