The present study was designed to investigate trajectories of identity development and their relationship to family functioning in a sample of Hispanic adolescents and their primary caregivers. Two hundred fifty adolescents completed measures of identity coherence and confusion and of family functioning, and parents completed measures of family functioning. Significant variability over time and across individuals emerged in identity confusion, but not in identity coherence. As a result, the present analyses focused on identity confusion. Changes in adolescent-reported, but not parent-reported, family functioning were significantly related to changes in identity confusion. Follow-up analyses suggested that family functioning primarily influences identity confusion in early adolescence, but that identity confusion begins to exert a reciprocal effect in middle adolescence. Exploratory latent growth mixture modeling (LGMM) analyses produced three classes of adolescents based on their baseline values and change trajectories in identity confusion. The potential for family-strengthening interventions to affect identity development is discussed. (Contains 7 notes, 2 tables and 3 figures.)