We examined the nature and implications of family differentiation among adolescents facing a life transition in 2 European countries with differing family cultures. One hundred and twenty-four Italian and 109 U.K. adolescents completed measures of family differentiation (cohesion and enmeshment), identity threat (perception of threat to the self associated with finishing school), life satisfaction, depressive symptoms, and anxiety. Confirmatory factor analyses showed that cohesion and enmeshment were distinguishable in both countries, orthogonal in the U.K. but positively correlated in Italy. Family cohesion was associated with better psychological well-being in both countries; enmeshment was associated with poorer psychological well-being in the U.K. but not in Italy. Structural equation models showed that effects on well-being were fully mediated by identity threat in both cultures.