This article examines possibilities for using Valsiner's zone theory to understand identity formation of mathematics teachers and mathematics teacher educators. We situate our analysis within a sociological frame for identity research, in which identity is interpreted as an action rather than an acquisition. Valsiner's theoretical approach is based on Vygotsky's notion of the zone of proximal development, but adds two other zone concepts to account for environmental constraints experienced by an individual (zone of free movement) and the means by which other people in the environment promote the individual's actions (zone of promoted action). We briefly summarise our previous research that has used zone theory to interpret teacher learning as identity formation in two contexts, involving secondary school mathematics teachers and teachers of subjects other than mathematics who are embedding numeracy into the school curriculum. We then extend our theoretical investigation of identity to a new context in order to analyse identity formation of mathematics teacher educators, that is, mathematics educators and mathematicians who contribute to the preparation of future teachers of mathematics. Our analysis incorporates the idea of productive tensions into zone theory, thus creating a theory of goal-directed change that can be used to understand identity development and the role of individual agency within sociocultural contexts.