One of the most widely used constructs to assess firm entrepreneurship is entrepreneurial orientation (EO) (Miller, 1983). A firm is considered to be entrepreneurial if it is innovative, proactive and risk-taking. The concept of EO emerged in the 1970s (Edmond and Wiklund, 2010) and has since then evoked a large number of studies (Wales, 2016). EO is found to closely reflect actual entrepreneurial firm behavior (Stambaugh et al., 2017) and is generally found to be positively related to firm performance (Wang, 2008). As pointed out by Wang (2008), an important message from the findings in the literature on the EO-performance relationship is that simply investigating the direct effect of EO on firm performance does not provide a complete picture. To unravel the mechanism by which EO improves firm performance, many different mediating and moderating variables have been studied (Rauch et al., 2009). A scientific gap in this line of research is the limited amount of studies on internal organizational moderators that further clarify the relationship between EO and firm performance (Gimenez and Ventura, 2005; Wales et al., 2013). Our study will address this gap by exploring how EO influences the performance of different functions in a firm and how these functions, in turn, influence overall firm performance. For managers, it is highly relevant to assess the degree in which their firm is entrepreneurial and to understand how that is related to internal firm aspects, because knowledge of these aspects allows managers to make their firm more entrepreneurial. A few studies have focused on specific internal firm aspects that play a role in the relationship between EO and firm performance. These studies focus on internal aspects such as market orientation (Buli, 2017), leadership behavior (Engelen et al., 2015), knowledge sharing (De Clercq et al., 2015), absorptive capacity (Engelen et al., 2014) and crossfunctional behavior within firms (Schneider and Engelen, 2015). Although these studies indicate the relevance of internal firm aspects in the relationship between EO and firm performance, they focus on different types of firm aspects. Hence, the results of these studies can neither be compared nor be combined to increase the body of knowledge on the relationship between EO and firm performance. We contribute to this stream of work by studying how the performance of separate business functions serve as mediators between EO and overall firm performance. A firm is usually involved in several business functions. (e.g. R&D, production, marketing and sales). These business functions contribute to the overall firm performance. We contribute to the existing literature by measuring the performance of separate business functions in a firm and by studying the mediating effect of the performance of these business functions in linking EO with overall performance. The aim of our study is to fill a serious gap, that is, knowing how different business functions in the firm relate to entrepreneurship, and to resolve the ongoing discussion on the contradictory relationship between one of the EO dimensions, especially risktaking, and firm’s overall performance. We consider a disaggregated conception of EO (Lumpkin and Dess, 1996) by distinguishing between three EO dimensions (innovativeness, proactiveness, risk-taking) and relate them to the performance of separate functions within the firm, that is, R&D, production and marketing and sales. Furthermore, we show how the performance of these functions in turn influences overall firm performance.