In this paper, we develop a framework for studying the role of group identities in contemporary cleavage formation. Identities, we suggest, hold the key to a central conundrum of current political sociology: the fact that today’s electoral realignments appear to be rooted in the social structure of post-industrial societies, while the decline of mass organizations has dissolved traditional links between politics and social structure. Bringing cleavage theory into dialog with the sociology of Pierre Bourdieu, we theorize how group identities may play an important role in stabilizing a new universalism-particularism cleavage emerging in Western Europe today. We identify two key processes of cleavage identity formation: bottom-up processes of “social closure” and top-down “classification struggles” waged by political entrepreneurs. For both processes, we review empirical findings and formulate an agenda for further research.