Inconsistent results have been found in prior research on the Bowen Family Systems Theory concept of differentiation of self and its application to individuals, couples, and families of different cultural backgrounds. In this regard, this study examined the impact of differentiation of self on healthy family functioning, family communication, and family satisfaction with 277 participants including South Koreans living in South Korea, South Korean‐born citizens living in the United States, and White Americans living in the United States. Multigroup confirmatory factor analysis identified the measurement invariance of a differentiation scale (DSI‐R) used for the three study groups. An analysis of covariance (ANCOVA) found significant differences between White Americans and South Koreans with regard to the level of differentiation. Results of multigroup structural equation modeling (SEM) analyses found a significant association between differentiation of self and healthy family functioning across the three groups with the American group having significantly higher differentiation than the two South Korean groups.” Implications for clinical practice and future research are discussed.