There has been little research into the experiences of and connections between language retention and identity construction among bilingual Spanish speaking children from Latin American backgrounds living in urban communities in Australia. Theoretical frameworks and research that examine the intersections between language retention and identity construction in the early years of children’s lives is a crucial in understandings the complexity of identity and bilingualism from a sociocritical perpective (Jones Díaz 2007). This is of particular relevance to educators working with families raising bilingual children as the formation of identity is constantly negotiated, transformed and contested amidst a background of dominant English-speaking social fields that exist in multicultural Australia. This paper draws on selected findings from recent qualitative research that examined young children’s bilingual voices and experiences using Spanish and English across a range of family, educational and community settings. The analysis draws on Bourdieu’s (1990, 1991) theory of social practice to examine the children’s views and perceptions of their proficiency and use of Spanish which constructed various dispositions through which they were able to deploy linguistic, cultural and social capital in these social fields. Other questions investigated in this paper detail the importance of the linguistic habitus in shaping identity which can permit or prohibit the children’s use of Spanish in educational, family and community contexts.