The influence of globalization on psychological functioning is examined. First, descriptions of how globalization is occurring in various world regions are presented. Then the psychological consequences of globalization are described, with a focus on identity issues. Specifically, it is argued that most people worldwide now develop a bicultural identity that combines their local identity with an identity linked to the global culture; that identity confusion may be increasing among young people in non-Western cultures as a result of globalization; that some people join self-selected cultures to maintain an identity that is separate from the global culture; and that a period of emerging adulthood increasingly extends identity explorations beyond adolescence, through the mid- to late twenties.