The plight of the adolescent deprived of his liberty remains a problem in post-apartheid South Africa. Adolescence is characterised by the developmental crisis to form a unique identity ensuring greater interpersonal differentiation, mobilisation of resources and the acquisition of new coping skills to form identity capital and the establishment of a reciprocal relationship with conventional society. However, when surrounded by conflicting value systems in an artificial prison environment marked by isolation, overcrowding and deprivation, one could expect this to be mostly a painful and prolonged experience. The aim of this study was to focus on gang activity as a particular risk factor impacting negatively on role experimentation and identity development of the incarcerated adolescent. Gang membership may assist the incarcerated adolescent with development deficits to attain ego identity through the provision of an identity pathway - enabling him to attain his own expectations as well as that of the group. Through purposive theoretical sampling, 83 male incarcerated research participants were selected for participation in this study. The application of the standardised Erikson scale (Ochse 1983) proved to be reliable in correctional context. The findings of this study show that incarcerated adolescents that achieved a low level of identity development were significantly more members of prison gangs than those with a high level of identity development. It also transpired that research participants with a lower level of identity development were significantly more likely to have friends that belonged to a gang than those with a higher level of identity development. These findings concur with both of the views of Erikson (1968:185) and Marcia (1975:157; 1967:119) on the common lack of purpose, value and direction associated with the adolescent with identity diffusion. Without any sense of direction, identity diffused subjects usually experience feelings of worthlessness and their delinquency becomes often a tool of self-destruction. Frequently, they are impulsive and irresponsible, which are indicators of weak superego strength and therefore, also behavioural traits that could promote the committing of crime. This lack of purpose, value and direction rendered the incarcerated adolescent with a low level of a personal identity in particular vulnerable to gang membership being in want of fulfilment of his emotional and security needs. It is concluded that the dysfuntionality of these adaptations of the adolescent to institutional life could be viewed as "normal" reactions to a set of pathological prison conditions.