Business failure can present a crisis to the entrepreneur. Such disruption to regular activity presents a rich arena to explore sensemaking, and research on business failure has addressed how entrepreneurs learn and make sense of the failure experience. Uncertainty, such as failure, can also threaten an individual’s identity. Identity refers to the existential question, “Who am I?” and is an important premise of entrepreneurship, where an entrepreneur’s activities are an expression of their identity. Because business failure clearly marks the end of a business but not the entrepreneur, the failure of the business may hold a significant threat towards the entrepreneur’s sense of self. Identity is therefore likely to play an important role in the entrepreneur’s ability to make sense of business failure. This study considers the role of identity in the sensemaking process. It asks how business failure threatens the entrepreneur’s identity; how identity management and reconstruction occur; and, how this identity work is interpreted in the sensemaking process, after a business failure event.