We explored how competition affects the quality of musical improvisation, as well as the intrinsic motivation and stress reported by improvisers. Amateur musicians improvised on a keyboard in one of two conditions: induced competition and no competition. Employing the consensual assessment technique, improvisations were assessed for creativity and technical goodness by 10 expert judges. Findings indicate that improvisations were judged as more creative under competitive than non-competitive conditions. Moreover, improvisers in the competition condition were more intrinsically motivated, as well as more stressed, than improvisers in the no competition condition. The creativity and technical goodness dimensions of improvisations were positively related to each other. The findings are discussed in light of the intense debate over the effects of extrinsic motivators on intrinsic motivation and creativity and offer mechanisms through which competition may affect creative performance as well as discuss the role of stress in affecting motivation and creativity.