["Business Strategy and the Environment, Volume 35, Issue 3, Page 3505-3522, March 2026. ", "\nABSTRACT\nSustainable performance has emerged as a critical concern for firms, and blockchain plays a pivotal role in facilitating sustainability outcomes. However, the mechanisms and boundary conditions through which blockchain use affects sustainable performance are unclear. Drawing on information technology‐enabled organizational capabilities theory, we propose how and when blockchain use affects sustainable performance, depending on the mediating role of blockchain capability and the moderating role of social capital. Based on survey data from 207 Chinese firms, the empirical results reveal that blockchain capability fully mediates the link between blockchain use and sustainable performance. Further analysis finds that social capital negatively moderates the connection between blockchain use and blockchain capability; namely, when blockchain is used to develop blockchain capability, social capital creates a substitution relationship. This research offers valuable insights into how firms can leverage blockchain to achieve sustainable performance by introducing a novel capability perspective.\n"]