A dominant assumption in prior literature posits that inter-organizational trust always positively contributes to the transactions between focal organization and outsiders. However, it is worth noting that inter-organizational trust may produce undesired negative effects on transaction benefits. In this paper, we revisit this assumption and develop a more comprehensive theoretical framework to establish the underlying mechanisms. We first discuss the connotation of inter-organizational trust, analyze the effect of different combinations of calculative and non-calculative components in the impacts of inter-organizational trust on transaction benefits, and logically deduce an inverted U-shaped relationship between inter-organizational trust and transaction benefits. Then, we propose two important situational factors for inter-organizational trust, namely the asymmetry of trust and the uncertainty of environment, and discuss their moderating effects on such an inverted U-shaped relationship. Next, we propose a set of managing tactics under different situational constraints. Finally, we discuss the implications of this study and the direction for future research.