This study examines the outcome of incongruence between home and school religious environments on predicting adolescent identification with religious values and worldview in Israeli religious high schools, and the possible mediating effects of general and identity-related aspects of school climate. The study compares Jewish students from religious observant Orthodox families with those from less-observant "Masorti" ("traditionalist") families. A total of 9090 Israeli high school students from 76 religious public schools participated. Students identified their parent's home as "Religious" or "Masorti" and filled out a measure on their own religious identification. School climate indices surveyed included aspects of good teacher-student and school-student relationships, and climate indices related to identity development processes. Results demonstrate that students from "Masorti" families experience school less favorably and identify less with school values. Identity climate indices were involved in mediating this relationship, demonstrating that school pedagogies fostering positive identity processes may play a key role in value formation in adolescence.