The biological, cognitive, and social changes that occur in adolescence stimulate young people to think about themselves, reflect on the kind of people they want to become, and find their place in society. Traditionally, these changes have been explained by Erikson's theory and Marcia's identity status model, but process‐oriented models of identity provide new insights. In particular, dual‐cycle models, such as the three‐factor identity model, focus on the dynamic process by which young people iteratively form and maintain their identity over time. This iterative process is captured by the interplay of commitment, in‐depth exploration, and reconsideration of commitment, as well as by distinct identity statuses. Furthermore, the extent to which adolescents find a stable identity is intertwined strongly with their psychosocial functioning and well‐being.