The current study examines whether a threat to group distinctiveness motivates the poor to glorify poverty as an identity management strategy. Research shows that threat to ingroup distinctiveness can motivate people to positively differentiate their group from similar outgroups on relevant dimensions of comparison. Little is known however about whether such processes would occur also with respect to devalued group characteristics that are not reflective of explicit group norms. This question is of high theoretical and practical importance because it can illustrate that people internalize and glorify even adverse traits as means of managing their social identity when faced with threat. We therefore tested whether among a poor community, individuals would glorify poverty when faced with distinctiveness threat. We collected data from Haredim (ultra‐Orthodox Jews), a poor and highly religious population in Israel. Across two experiments, we manipulated distinctiveness threat via inducing similarity between Haredim and seculars in Israel. We found that poverty was reconstrued as positive and desirable following distinctiveness threat, but only among Haredim who have a high commitment to group norms (Study 1) and who strongly justify their own social system (Study 2). Theoretical and applied implications of the findings are discussed.