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Over the last fifty years the Israeli-Palestinian conflict has generated massive numbers of refugees. The scale and longevity of the conflict has made the Palestinian refugee problem the most protracted and largest refugee situation in the world today (Merhab et al. 2006). The processes of becoming a refugee and living as a refugee have had direct impacts on the formation of Palestinian identity. In this paper, I examine the influence of refugee status on identity and discuss how this identity affects potential solutions to the protracted refugee situation. I offer a brief historical background to the creation of Palestinian refugees. And, I outline what defines a refugee and, more specifically, a Palestinian refugee. The results of this review indicate that Palestinian refugee- identity is strongly influenced by a collective sense of victimization and nationalism. This collective identity is passed on to subsequent generations living in exile. However, refugee status is but one factor in the formation of identity - with other factors being gender, religion, place of exile, and place of origin. The final discussion also indicates that no easy solution to the refugee problem is imminent, but that the many components that make up Palestinian identity should be addressed when seeking solutions to both the refugee situation and the conflict that generated the refugees.