We develop a new perspective on leadership and identity in the family business using the concepts of identity process theory, transformative learning and identity work to demonstrate how the leader of a first- to second-generation transitioning family business in a traditional masculinist manufacturing sector constructs her identity in the face of significant identity threats personally and organisationally. We illustrate the interconnectedness between the leader’s identity, her lived experience, current context and enactment of her leadership. Our analysis demonstrates the applicability of identity process theory as a novel framework for identity research in family business, and of transformative learning as both a coping strategy and an identity workplace in the face of significant identity threats. © The Author(s) 2019.