The research aims at exploring how macro and micro contextual factors have influenced on the construction of English as a foreign language (EFL) teachers' identity in education reform contexts in Chile based on sociocultural theories. Grounded theory was used in the methodological design to analyse and categorize data utilizing the ATLAS.ti software. Deep semi-structured and focus group interviews were used to collect data, and twelve EFL teachers participated in the research. From a macro contextual environment, results show that educational demands turn into bureaucracy and a non-coherent EFL national curriculum which have weakened teachers' identity resulting in a sense of frustration and resignation. Micro contextual factors have emotional (appreciation, student/teacher bond, and work climate) and cognitive dimensions (in-service training) with a dual role--strengthening or weakening EFL teachers' identities.