Cultural identity is a part of a person's identity, or their self-conception and self-perception, and is related to nationality, ethnicity, religion, social class, generation, locality, gender, or any kind of social group that has its own distinct culture. In this way, cultural identity is both characteristic of the individual but also of the culturally identical group of members sharing the same cultural identity or upbringing. Cultural identity is an unfixed process that is continually evolving within the discourses of social, cultural, and historical experiences. Some people undergo more cultural identity changes as opposed to others, those who change less often have a clear cultural identity. This means that they have a dynamic yet stable integration of their culture.

There are three pieces that make up a person's cultural identity: cultural knowledge, category label, and social connections. Cultural knowledge refers to a person's connection to their identity through understanding their culture's core characteristics. Category label refers to a person's connection to their identity through indirect membership of said culture. Social connections refers to a person's connection to their identity through their social relationships. Cultural identity is developed through a series of steps. First, a person comes to understand a culture through being immersed in those values, beliefs, and practices. Second, the person then identifies as a member of that culture dependent on their rank within that community. Third, they develop relationships such as immediate family, close friends, coworkers, and neighbors.

Culture is a term that is highly complex and often contested, with academics recording about 160 variations in meaning. Underpinning the notion of culture is that it is dynamic and changes over time and in different contexts resulting in many people today identifying with one or more cultures and many different ways.

It is a defining feature of a person's identity, contributing to how they see themselves and the groups with which they identify. A person's understanding of their own and other's identities develops from birth and is shaped by the values and attitudes prevalent at home and in the surrounding community.

Various modern cultural studies and social theories have investigated cultural identity and understanding. In recent decades, a new form of identification has emerged that breaks down the understanding of the individual as a coherent whole subject into a collection of various cultural identifiers. These cultural identifiers may be the result of various conditions including: location, sex, race, history, nationality, language, sexuality, religious beliefs, ethnicity, aesthetics, and food. As one author writes:

When talking about identity, we generally define this word as the series of physical features that differentiate a person. Thus at birth, our parents declare us and give us a name with which they will identify us based on whether we are a boy or a girl. Identity is not only a right that declares the name, sex, time, and place that one is born; the word identity goes beyond what we define it. Identity is a function of elements that portrays one in a dynamic way, in constant evolution, throughout the stages of life identity develops based on personal experiences, tastes, and choices of a sexual and religious nature, as well as the social environment, these being some of the main parameters that influence and transform the day to day and allow us to discover a new part of ourselves.

Categorizations about identity, even when codified and hardened into clear typologies by processes of colonization, state formation, or general modernizing processes, are always full of tensions and contradictions. Sometimes these contradictions are destructive, but they can also be creative and positive

The divisions between cultures can be very fine in some parts of the world, especially in rapidly changing cities where the population is ethnically diverse and social unity is based primarily on locational contiguity.