Globalization has led to a dramatic increase in intercultural service encounters between services providers and customers from diverse cultural backgrounds. This paper explores the causal relationship between service employees’ cultural intelligence and adaptive sales behavior in intercultural service encounters, and the mediating effect of cognitive and emotional empathy on this relationship. A quantitative survey methodology was utilized to collect data on 341 salespeople at duty-free shops located on Jeju Island, Korea. Data analysis was conducted using SPSS 18 and Amos 18. The results show that cultural intelligence has a significant impact on cognitive empathy, emotional empathy, and adaptive sales behavior. Cognitive empathy has a positive impact on adaptive sales behavior, whereas the relationship between emotional empathy and adaptive sales behavior is not significant. Additionally, cognitive empathy mediates the relationship of cultural intelligence and adaptive sales behavior. This study has useful managerial implications for employee selection, training, and development in service firms engaged in intercultural service encounters. This study extends prior research on intercultural service encounters by exploring the direct impact of cultural intelligence on intercultural adaptation and the mediating effect of empathy, suggesting the presence of a cognitive mechanism that plays a key role in the impact of cultural intelligence on adaptive sales behavior.