This article discusses the positive impact of the concept of positioning on identity studies, with particular reference to the analysis of narratives. It argues that the notion of positioning (particularly as developed in Bamberg’s 1997 three levels model), together with other constructs such as indexicality, has helped enormously in bridging the gap (particularly in interview based research) between interactionally-oriented and more traditionally oriented studies of narrative identities. It focuses on level 3 positioning to argue that this construct allows for an approach to the construction of identity in discourse that occupies a middle ground between talk-in-interaction approaches that center exclusively on participant orientations at the local level and approaches that regard identity as basically determined by macro social processes and only manifested in discourse. To illustrate level 3 positioning, the paper analyzes a narrative taken from a corpus of stories of language conflict told by Latin American immigrant women to the US. It shows that the narrator constructs her identity in relation to Discourses and ideologies about language and migration showing that interpretation of her positioning is based on close analysis of discourse at the local level, ethnographic data and understanding of macro social processes underlying power relations.