Mixed families offer a unique opportunity to explore the interrelated aspects of identity such as religion, ethnicity, and nationalism. In Israel, intermarriages of Muslims and Jews are particularly interesting because the complex tensions between these identities are intertwined with the national conflict between Israelis and Palestinians. However, such mixed families have rarely been studied. The purpose of this study is to identify the ways in which mixed families construct their identities in the context of a conflictual society. It is based on ethnographic work conducted among 16 Jewish–Muslim families. Findings indicate two patterns of identity formation: single identity, in which one spouse transitions to the other spouse’s culture, and hybrid identity, in which each spouse takes part in the other’s religious and cultural practices. This article demonstrates how socioeconomic status affects the choices that mixed families make in the process of identity formation in the context of a conflictual society.