This paper empirically tests leadership identity construction theory (DeRue & Ashford, 2010), conceptually framing claiming and granting leadership as a negotiated process that influences leader- ship perceptions and decision-making in interdependent contexts. In Study 1a, an avatar video- based experimental vignette (replicated in Study 1b with a non-video scenario), we found that when a team member accepted an actor’s leadership claim, observers' leadership ratings of the actor increased, whereas when the team member rejected the claim, observers' leadership ratings of the fellow team member increased. However, when an actor granted leadership, the fellow team member’s response did not influence leadership ratings. Study 2 extended the conceptual model by identifying how claiming and granting influence leadership perceptions – through perceived competence – and when claiming and granting exert greatest influence, finding that women observers vary more in their responses to claiming and granting. The negotiated relational leader identity process ultimately influenced observer decision-making.