There is a growing amount of research showing that a shared social identity and the sense of belonging to a family have a potential effect on health. However, little is known about the effects of severe mental illness on family identity. The authors carried out this thematic synthesis based on a systematic review of literature on family narratives of severe mental illness and family identity. The main findings indicate that in many families (i) their identity—as a shared social identity—undergoes a transformation process by which the identity aspects of being a family are reinforced; (ii) family members often take on a caring role as their main family role; and finally, (iii) a cultural component shapes this transformation process. The authors describe implications for research and application in the mental health field. All in all, family identity is transformed by the experience of severe mental illness.