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Although much research has been done on the relationship between leader-member exchange (LMX) and organizational citizenship behavior (OCB), little attention has been paid to the mechanism underpinning the relationship. Based on a sample of 214 supervisor-subordinate dyads from indigenous family business in China, this paper examines the mechanism by which LMX affects OCB, especially the mediating role of perceived insider status and the moderating role of Chinese traditionality. Structural equation modeling results show that: (1) LMX is positively related to OCB, and (2) perceived insider status fully mediates the relationship between LMX and OCB. Hierarchical regression results further reveal that Chinese traditionality moderates the effect of LMX on perceived insider status.