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The present paper explores psychological processes that underpin the success of community change in the context of urban regeneration schemes. We adopt a social identity approach to develop an understanding of the ways in which social identity dynamics may impact upon peoples' experiences of regeneration, and what influence these identity processes have on the creation of new communities. Qualitative interviews, using thematic analysis as an analytic technique, were conducted with community members (n = 14) in a recently (2001–2011) regenerated area in the South‐West of England. Three overarching themes were identified: Patterns of identification, willingness to engage, and the notion of regeneration as an event. The research overall highlights the central role of group‐based identity in understanding the processes of regeneration and how this is experienced by different community members. Findings are discussed in relation to the impact regeneration schemes have on community members' sense of collective self, unity, and engagement. The research highlights the pivotal role of social identity processes in delivering successful and sustainable strategies of urban regeneration. [ABSTRACT FROM AUTHOR]