According to the theories of Erikson, Marcia, and Higgins, adolescents who can cultivate a clear and positive identity after their developmental struggles in adolescence often advance more smoothly into adulthood. Identity is organized, learned, and dynamic, and subjective evaluation of an individual's identity has emotional consequences for that individual. This paper discusses literature on the nature and importance of identity and presents strategies such as self-esteem enhancement, management of exploration and commitment, as well as reduction of self-discrepancies to help adolescents develop functional identity. Significant determinants of a person's identity development, namely gender and cultural issues, are also addressed as they are important in designing the "Positive Identity Development" package of Positive Adolescent Training through Holistic Social Programmes (P.A.T.H.S.), supported by the Hong Kong Jockey Club Charities Trust, to help adolescents develop a positive identity.