This study adopts both Social Identity Theory and Social Constructivist Approach in examining construction of social identity in inhabitants of a refugee settlement in the province of Vojvodina, Republic of Serbia. Focus group discussions were conducted with seventeen former refugees from Bosnia and Herzegovina. Content analysis and qualitative interpretation were applied. Irrespective of participants being of the same ethnicity, religion and language as the locals, it appears that (a) a three-stage causal sequence: categorisation-identity-social comparison persistently occur in three age groups; (b) there are differences in participants’ sense of social identity based on their age upon reaching the settlement and; (c) nature of participants’ identification is socially constructed and of dynamic nature and dependent on both broad (regional) and narrow (refugee settlement) social context. Results also indicate that isolating refugees in a remote refugee settlement, specifically older refugees, hinders adaptation and integration into the new community.