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Leveraging digital technologies is a major concern for companies and has significant implications for their information technology (IT) functions. In many cases, a bi‐modal IT function is established: a ‘traditional IT’ mode focusing on the stability and exploitation of existing IT resources and an ‘agile IT’ mode focusing on exploring new technologies. Whereas previous research has predominantly taken an organisational‐level view of bi‐modal IT by treating it as a single, aggregated entity, we provide a micro‐foundations perspective on the intricate and paradoxical interrelationships between the two IT modes. Based on a multi‐case study with companies from different industries and of varying sizes, we uncover nine core tensions between traditional IT and agile IT as manifestations of five underlying paradoxes. We also identify corresponding management practices to address these tensions and paradoxes. Our study contributes to Information Systems research by disaggregating bi‐modal IT and capturing the tensions and their underlying paradoxes at the organisational and individual levels that bi‐modal IT entails. By highlighting the intricate interdependencies between the traditional and agile IT modes, we show that bi‐modal IT can be messier and more contested than previously anticipated. For practitioners, our study offers an overview of paradoxes and tensions that may arise in bi‐modal IT settings and provides suggestions on how to manage them.