In psychology, there is growing research interest in the issues of cultural identity, which has been recognized to be of much interest in shaping human''s behavior and experience. Cultural identity is a new concept in the field of Cultural Psychology. Consequently, studies that define and account for this topic are still scarce. The present qualitative study aims at giving a better understanding of the development of cultural identity and it examines how the experience of studying abroad influences the development of cultural identity of Albanian students in Italy and the United Kingdom. Because the two countries have different histories with immigration, it was hypothesized that the experience of studying abroad would influence their cultural identity differently.The interviews explored four components of cultural identity: self-identification, cultural involvement, sense of belonging, and evaluative attitudes (Phinney,1998).The analysis showed that, even though their experiences differed, Albanian students in both locations developed transcultural identities.This supports the increasing growth of transcultural identities suggested by Suarez-Orozco (2001).