The concept of social exclusion has been widely applied to explain the marginalization of rural–urban migrants in contemporary China, yet aspects of migrants’ own perceptions of their identity have received little attention. This chapter examines some of the underlying mechanisms of social exclusion in contemporary Chinese urban society by deconstructing perceived boundaries between rural–urban migrants and local urbanites. Qualitative analysis of data collected from a rural village in central China suggest that migrants’ identities are shaped and reshaped by their hukou and employment status, home ownership and social network. These factors are interwoven, leading to more than one identity in migrants’ narrative discourses. Most survey respondents, when asked to choose either a rural or an urban identity, were ambivalent, indicating apparently blurry identity boundaries. The findings highlight an intertwining effect of institutional and market forces in the process of rural–urban migrants’ identity formation and transformation in urban China.