This chapter reviews the concept of funds of identity and its fundamental role in advancing pre-service teachers' awareness and understanding of their students' cultural and linguistic identities as well as their own. The chapter begins with an overview of the concept of identity and subsequently moves into an examination of the history of the funds of knowledge approach and traces its extension into the funds of identity approach along with the similarities and differences between both procedures. The chapter then summarizes previous literature on funds of identity and highlights the main findings of these studies. Finally, the chapter examines various activities that can be used with both students and student-teachers alike to document, identify, and recognize essential aspects of their linguistic and cultural backgrounds.