Family is perhaps the most influential system in individuals' life in which various behaviors are learnt. Family functioning refers to the ability of family to meet its responsibilities. The present correlation study used a multi-stage cluster sampling method to recruit 686 subjects including 338 males and 348 females from all high school students in Shiraz, Southern Iran. The McMaster family assessment device, identity styles inventory, and the conflict resolution questionnaire were used to collect data on family functioning in relation with subjects' identity style and conflict resolution capacity. Findings demonstrated a significant negative correlation between family functioning and informative/normative identity styles both in males and females. There was however a significant positive correlation between family functioning and avoidance identity style in both gender groups. With regard to the relation between family functioning and the ability of conflict resolution, our analysis revealed a significant negative correlation both in males and females. The present report corroborated the defining role of family functioning in the development of adolescents' psychological characters.