The paper examines how the tiny ethno-cultural group of Setos constructs its identity in the multicultural context. The study examines the validity of three acculturation models and tests earlier findings on the relationship between identity and well-being. The results suggest that Setos have clearly adopted a multicultural identity strategy while not merging different identities, and that they have managed to separate the material wellbeing from the pride of their identity. Despite its small size and peripheral location, the Setos' way to preserve their identity in a constantly changing context is an interesting lesson for other indigenous groups, and also for bigger neighbors.Setos -a tiny indigenous ethno-cultural group situated on the Estonian-Russian border area -are worth wider attention for several reasons. There are several in-depth studies on Seto culture and identity (Eichenbaum 1998;Jääts 1998;Runnel 2002a) that focus on historical and ethnographical analyses while psychological aspects of acculturation, (bicultural) identity formation and psychological well-being in relation to identity, have deserved much less attention. In the social psychological research tradition, acculturation is studied mainly among immigrant groups, and cultural and psychological changes of indigenous communities in Europe but also elsewhere have deserved much less attention. In the European perspective, only a couple of studies about Saami, Roma, Basque, and other indigenous people's acculturation issues can be found.Current study that follows social psychological theories of acculturation and bicultural identity development asks whether the principles of acculturation theories proved in numerous immigrant studies apply also for the sedentary group related to majority culture for hundreds and thousands of years? Seto culture shares some elements with neighboring cultures but also has several unique aspects. Their language could be called a dialect of Estonian, but if spoken properly Estonians have trouble in understanding it. Setos practice Russian the Orthodox religion with pagan elements, and have well-preserved unique folk traditions: national costumes, traditional holidays, and folk music, including the existence of bridal and funeral laments and a very special polyphonic folk song leelo. Setos, who have never been more numerous than 20,000 people and whose territory is currently divided between two countries, have survived through four different political regimes during the