This project investigated the extent to which narrative therapy is effective in altering identity in young adults, defined here as individuals between the ages of 18 and 25 years in line with Arnett's (2000) theory of emerging adulthood. This effectiveness was evaluated through indicators of identity change such as self-schema, narrative coherence, and overall mental health. Evidence suggests that identity reconstruction during young adulthood is beneficial, as this stage is developmentally sensitive. This project critically examined narrative therapy and the theoretical framework for identity change, and determined its effectiveness in reshaping identity. It also explored identity development in young adulthood, evaluating empirical data to test theoretical arguments, as well as unique strategies to cope with limitations posed by the therapeutic approach. Strategies involved in the therapy, including externalisation, thickening alternative stories, and appreciating outsider witnesses, were found to increase the therapy's effectiveness for a wider population. These strategies can shift self-perception during young adulthood. Moreover, by comparing cognitive behavioural therapy (CBT), a prominent therapy in psychological literature, with narrative therapy, this project assessed their suitability for identity reconstruction in young adulthood. This form of therapy is largely effective in reconstructing identity in young adults; nonetheless, factors such as personality, socio-cultural context, and past experiences can influence its overall effectiveness.