Players can invite other players to form a team with them by right-clicking on the player character and selecting "Team up". Any member of the team with the invite permission can invite other players using the same method. To leave a team, Simply right click on the ground and select "Remove from team".
A team provides a separate chat channel to the members. Being a member of a team allows you to pick up items another team member dropped outside of a deed on non-pvp servers, which is otherwise disallowed as long as the owner is still close by. This restriction is also lifted for unlocked boats and carts which were dragged.
Team membership is not persistent unless at least two members of the team stay online. When the team leader logs off, another random team member is appointed new leader. It is not possible to be a member of two teams at once. When there are only 2 players in the team and one leaves, the other person gets a message saying "The team has dissolved."
The team leader has a different chat color and can manage the team and remove members, toggle their invite permission, and transfer leadership to another member.
When crossing to another server, the team no longer exists and must be created again.