Assuming a cultural psychology approach, this study examines the life stories of 30 Israeli and Palestinian adolescent participants in a coexistence program. Prior to participation, youth identity was characterized by polarization in which an ingroup ideology is internalized with little understanding of the outgroup's ideological perspective. Three identity-related outcomes emerged following participation. Identity transcendence, in which a reduction in salience of ingroup ideology was accompanied by increased recognition of outgroup ideological legitimacy, characterized the most common immediate outcome. Identity accentuation characterized the long-term impact for most youth, whose ideological identifications ultimately conformed to an ingroup identity narrative. Identity conflict occurred among youth who struggled to integrate the experience of coexistence into the life story. Findings suggest (a) the challenges of identity intervention in the context of intractable conflict, and (b) a context-specific theory of identity in which polarized identities contribute to the reproduction and intractability of the conflict across generations. (Contains 1 table and 3 figures.)