Identity formation, also called identity development or identity construction, is a complex process in which humans develop a clear and unique view of themselves and of their identity.

Self-concept, personality development, and values are all closely related to identity formation. Individuation is also a critical part of identity formation. Continuity and inner unity are healthy identity formation, while a disruption in either could be viewed and labeled as abnormal development; certain situations, like childhood trauma, can contribute to abnormal development. Specific factors also play a role in identity formation, such as race, ethnicity, and spirituality.

The concept of personal continuity, or personal identity, refers to an individual posing questions about themselves that challenge their original perception, like "Who am I?" The process defines individuals to others and themselves. Various factors make up a person's actual identity, including a sense of continuity, a sense of uniqueness from others, and a sense of affiliation based on their membership in various groups like family, ethnicity, and occupation. These group identities demonstrate the human need for affiliation or for people to define themselves in the eyes of others and themselves.

Identities are formed on many levels. The micro-level is self-definition, relations with people, and issues as seen from a personal or an individual perspective. The meso-level pertains to how identities are viewed, formed, and questioned by immediate communities and/or families. The macro-level are the connections among and individuals and issues from a national perspective. The global level connects individuals, issues, and groups at a worldwide level.

Identity is often described as finite and consisting of separate and distinct parts (e.g., family, cultural, personal, professional).

Many theories of development have aspects of identity formation included in them. Two theories directly address the process of identity formation: Erik Erikson's stages of psychosocial development (specifically the Identity versus Role Confusion stage), James Marcia's identity status theory, and Jeffrey Arnett's theories of identity formation in emerging adulthood.

Erikson's theory is that people experience different crises or conflicts throughout their lives in eight stages. Each stage occurs at a certain point in life and must be successfully resolved to progress to the next stage. The particular stage relevant to identity formation takes place during adolescence: Identity versus Role Confusion.

The Identity versus Role Confusion stage involves adolescents trying to figure out who they are in order to form a basic identity that they will build on throughout their life, especially concerning social and occupational identities. They ask themselves the existential questions: "Who am I?" and "What can I be?" They face the complexities of determining one's own identity. Erikson stated that this crisis is resolved with identity achievement, the point at which an individual has extensively considered various goals and values, accepting some and rejecting others, and understands who they are as a unique person. When an adolescent attains identity achievement, they are ready to enter the next stage of Erikson's theory, Intimacy versus Isolation, where they will form strong friendships and a sense of companionship with others.