This article seeks to explore the construction of group and professional identities in situations of organizational change. It considers empirical material drawn from a health demonstration project funded by the Scottish Executive Health Department, and uses insights from this project to discuss issues that arise from identity construction(s) and organizational change. In the course of the project studied here, a new organizational form was developed which involved a network arrangement with a voluntary sector organization and the employment of “lay-workers” in what had traditionally been a professional setting. Our analysis of the way actors made sense of their identities reveals that characterizations of both self and other became barriers to the change process. These identity dynamics were significant in determining the way people interpreted and responded to change within this project and which may relate to other change-oriented situations.