diff --git a/app/models/group.rb b/app/models/group.rb
index 240a17f1dc181bb693cb432cc93bc6a3fcfb4d89..27dc4e8f3193d3614d92aec80bb26badba9fcf30 100644
--- a/app/models/group.rb
+++ b/app/models/group.rb
@@ -21,6 +21,7 @@ class Group < Namespace
   has_many :shared_projects, through: :project_group_links, source: :project
   has_many :notification_settings, dependent: :destroy, as: :source
   has_many :labels, class_name: 'GroupLabel'
+  has_one :chat_team, dependent: :destroy
 
   validate :avatar_type, if: ->(user) { user.avatar.present? && user.avatar_changed? }
   validate :visibility_level_allowed_by_projects
diff --git a/app/services/groups/create_service.rb b/app/services/groups/create_service.rb
index febeb661fb5f3bb5622a5c06591e19d223dde4df..209fd15f4814c7933cd43e2ee8645c35fc536529 100644
--- a/app/services/groups/create_service.rb
+++ b/app/services/groups/create_service.rb
@@ -22,6 +22,11 @@ module Groups
       @group.name ||= @group.path.dup
       @group.save
       @group.add_owner(current_user)
+
+      if params[:create_chat_team] && Gitlab.config.mattermost.enabled
+        Mattermost::CreateTeamWorker.perform_async(@group.id, current_user.id)
+      end
+
       @group
     end
   end
diff --git a/app/views/groups/new.html.haml b/app/views/groups/new.html.haml
index 38d63fd9acc64be3e3e7d7bb607cfdff2136c54b..8e1513b151b2ead2ee0bb3d6b20b9d2e0dc4b84b 100644
--- a/app/views/groups/new.html.haml
+++ b/app/views/groups/new.html.haml
@@ -16,6 +16,11 @@
 
   = render 'shared/visibility_level', f: f, visibility_level: default_group_visibility, can_change_visibility_level: true, form_model: @group
 
+  .form-group
+    = f.label :create_chat_team, "Create Mattermost Team", class: 'control-label'
+    .col-sm-10
+      = f.check_box :chat_team
+
   .form-group
     .col-sm-offset-2.col-sm-10
       = render 'shared/group_tips'
diff --git a/app/workers/mattermost/create_team_worker.rb b/app/workers/mattermost/create_team_worker.rb
new file mode 100644
index 0000000000000000000000000000000000000000..69486569cbffd7d766fe8536861dd7aa876f066c
--- /dev/null
+++ b/app/workers/mattermost/create_team_worker.rb
@@ -0,0 +1,28 @@
+module Mattermost
+  class CreateTeamWorker
+    include Sidekiq::Worker
+    include DedicatedSidekiqQueue
+
+    def perform(group_id, current_user_id, options = {})
+      @group = Group.find(group_id)
+      current_user = User.find(current_user_id)
+
+      options = team_params.merge(options)
+
+      # The user that creates the team will be Team Admin
+      response = Mattermost::Team.new(current_user).create(options)
+
+      ChatTeam.create!(namespace: @group, name: response['name'], team_id: response['id'])
+    end
+
+    private
+
+    def team_params
+      {
+        name: @group.path[0..59],
+        display_name: @group.name[0..59],
+        type: @group.public? ? 'O' : 'I' # Open vs Invite-only
+      }
+    end
+  end
+end
diff --git a/db/migrate/20170120131253_create_chat_teams.rb b/db/migrate/20170120131253_create_chat_teams.rb
new file mode 100644
index 0000000000000000000000000000000000000000..6476c23915288682d4016e6a73443cd4f04130df
--- /dev/null
+++ b/db/migrate/20170120131253_create_chat_teams.rb
@@ -0,0 +1,17 @@
+class CreateChatTeams < ActiveRecord::Migration
+  include Gitlab::Database::MigrationHelpers
+
+  DOWNTIME = false
+
+  def change
+    create_table :chat_teams do |t|
+      t.integer :namespace_id, index: true
+      t.string :team_id
+      t.string :name
+
+      t.timestamps null: false
+    end
+
+    add_foreign_key :chat_teams, :namespaces, on_delete: :cascade
+  end
+end
diff --git a/db/schema.rb b/db/schema.rb
index 52672406ec643bb62e98b591b66412594516a358..0ae208fb5e4ebbd9ad80ea484d589b7b0189b159 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -171,6 +171,16 @@ ActiveRecord::Schema.define(version: 20170214111112) do
   add_index "chat_names", ["service_id", "team_id", "chat_id"], name: "index_chat_names_on_service_id_and_team_id_and_chat_id", unique: true, using: :btree
   add_index "chat_names", ["user_id", "service_id"], name: "index_chat_names_on_user_id_and_service_id", unique: true, using: :btree
 
+  create_table "chat_teams", force: :cascade do |t|
+    t.integer "namespace_id"
+    t.string "team_id"
+    t.string "name"
+    t.datetime "created_at", null: false
+    t.datetime "updated_at", null: false
+  end
+
+  add_index "chat_teams", ["namespace_id"], name: "index_chat_teams_on_namespace_id", using: :btree
+
   create_table "ci_application_settings", force: :cascade do |t|
     t.boolean "all_broken_builds"
     t.boolean "add_pusher"
@@ -1330,6 +1340,7 @@ ActiveRecord::Schema.define(version: 20170214111112) do
   add_index "web_hooks", ["project_id"], name: "index_web_hooks_on_project_id", using: :btree
 
   add_foreign_key "boards", "projects"
+  add_foreign_key "chat_teams", "namespaces", on_delete: :cascade
   add_foreign_key "issue_metrics", "issues", on_delete: :cascade
   add_foreign_key "label_priorities", "labels", on_delete: :cascade
   add_foreign_key "label_priorities", "projects", on_delete: :cascade
diff --git a/lib/mattermost/session.rb b/lib/mattermost/session.rb
index 377cb7b10211f4b8101d923d6fb99c0f0500cb32..d4b4ba97f8ce4ddf8ab63b029767f3f7b315689a 100644
--- a/lib/mattermost/session.rb
+++ b/lib/mattermost/session.rb
@@ -153,7 +153,7 @@ module Mattermost
       yield
     rescue HTTParty::Error => e
       raise Mattermost::ConnectionError.new(e.message)
-    rescue Errno::ECONNREFUSED
+    rescue Errno::ECONNREFUSED => e
       raise Mattermost::ConnectionError.new(e.message)
     end
   end
diff --git a/lib/mattermost/team.rb b/lib/mattermost/team.rb
index 09dfd082b3a5e4fb211219a13a7445de1105310f..9e80f7f8571eae64836a460633e5ddd207dc724d 100644
--- a/lib/mattermost/team.rb
+++ b/lib/mattermost/team.rb
@@ -1,7 +1,12 @@
 module Mattermost
   class Team < Client
+    # Returns **all** teams for an admin
     def all
       session_get('/api/v3/teams/all')
     end
+
+    def create(params)
+      session_post('/api/v3/teams/create', body: params.to_json)
+    end
   end
 end
diff --git a/spec/models/chat_team_spec.rb b/spec/models/chat_team_spec.rb
new file mode 100644
index 0000000000000000000000000000000000000000..37a22f5cd6d501cc56dad34641c97cc819529645
--- /dev/null
+++ b/spec/models/chat_team_spec.rb
@@ -0,0 +1,10 @@
+require 'spec_helper'
+
+describe ChatTeam, type: :model do
+  # Associations
+  it { is_expected.to belong_to(:group) }
+
+  # Fields
+  it { is_expected.to respond_to(:name) }
+  it { is_expected.to respond_to(:team_id) }
+end
diff --git a/spec/models/group_spec.rb b/spec/models/group_spec.rb
index a4e6eb4e3a6e3f0181a1263b73bfbba47b638aa8..8cfc208545808453b633243a7902679c18624dfc 100644
--- a/spec/models/group_spec.rb
+++ b/spec/models/group_spec.rb
@@ -13,6 +13,7 @@ describe Group, models: true do
     it { is_expected.to have_many(:shared_projects).through(:project_group_links) }
     it { is_expected.to have_many(:notification_settings).dependent(:destroy) }
     it { is_expected.to have_many(:labels).class_name('GroupLabel') }
+    it { is_expected.to have_one(:chat_team) }
 
     describe '#members & #requesters' do
       let(:requester) { create(:user) }
diff --git a/spec/workers/mattermost/create_team_worker_spec.rb b/spec/workers/mattermost/create_team_worker_spec.rb
new file mode 100644
index 0000000000000000000000000000000000000000..a6b87967ca29e5b7e92dff84dcab4c918613beba
--- /dev/null
+++ b/spec/workers/mattermost/create_team_worker_spec.rb
@@ -0,0 +1,21 @@
+require 'spec_helper'
+
+describe Mattermost::CreateTeamWorker do
+  let(:group) { create(:group, path: 'path', name: 'name') }
+  let(:admin) { create(:admin) }
+
+  describe '.perform' do
+    subject { described_class.new.perform(group.id, admin.id) }
+
+    before do
+      allow_any_instance_of(Mattermost::Team).
+        to receive(:create).
+        with(name: "path", display_name: "name", type: "O").
+        and_return('name' => 'my team', 'id' => 'sjfkdlwkdjfwlkfjwf')
+    end
+
+    it 'creates a new chat team' do
+      expect { subject }.to change { ChatTeam.count }.from(0).to(1)
+    end
+  end
+end