Having a sense of purpose has been discussed as a developmental asset for youth and as an outgrowth of establishing a sense of identity. Using the identity capital model as a theoretical framework, 3 studies examined purpose as a mediator in the relationship between identity and well-being among adolescents and emerging adults. In Study 1A, (n = 110), purpose commitment was positively associated with positive affect, hope, happiness among adolescents, and fully mediated associations between identity commitment and these indices of well-being. These findings were replicated in Study 1B (n = 398), with a sample of emerging adults and using different measures of well-being. In Study 2, multilevel random coefficient modeling analyses examined the role of identity and purpose in the daily lives of adolescents (n = 135). Results showed that purpose commitment fully mediated the relationship between identity and changes in daily positive and negative affect. Overall, findings suggest that cultivating a sense of purpose in life may be an important mechanism through which a stable identity contributes to well-being. (Contains 6 tables and 1 footnote.)