This article contributes to ongoing discussion of the Bourdieusian concept of cultural capital and current attempts to elaborate this concept and its derivatives. The paper identifies "identity capital", the capacity to create a narrative of social and self-awareness by constructing a flexible sense of self. This concept explains findings from a longitudinal ethnography with nine children and young people over a 13-year period from pre-school to the age of 17. Analysis of the data shows that this particular capacity is developed through certain kinds of privileged discourses and the opportunities provided within socially advantaged schools and families. Two case studies are selected to reveal how identity capital interacts with other identifiable forms of capital that compound and entrench each other. The paper concludes by arguing that deficiencies in identity capital could be addressed within schooling in order to support the creation of this important resource.