The fulfillment of the basic psychological needs for autonomy, competence, and relatedness as postulated within self-determination theory was hypothesized to play an energizing role in identity formation, conceptualized as multiple dimensions of exploration and commitment. Two studies among high school and college students (N = 714) were conducted to investigate (a) the cross-sectional relationships between need satisfaction and the identity dimensions and (b) the direction of effects using cross-lagged analyses. Three competing longitudinal models were tested: a need satisfaction main-effects model, an identity main-effects model, and a reciprocal effects model. All 3 needs had meaningful relationships with the identity dimensions, and, although there was a predominance of paths from the needs to the identity dimensions, the reciprocal effects model received most support. Further, identity statuses (representing multivariate combinations of the identity dimensions) were meaningfully related to satisfaction of the 3 needs, with identity achievement scoring highest on all 3 indices of need satisfaction. Suggestions for future research and counseling implications are discussed. (Contains 4 tables and 2 figures.)