Business failure is a psychologically demanding phase in an entrepreneur’s life (Byrne & Shepherd, 2015; Shepherd, 2003). Recovery can be challenging, as business failure may significantly threaten the entrepreneur’s salient role identity (Shepherd & Williams, 2016; Petriglieri, 2011). However, existing empirical research has overlooked how business failure impacts the entrepreneur’s role identity. We conduct an inductive study on identity work during entrepreneurial failure to explore how entrepreneurs respond to role identity threats by engaging in identity transition, abandonment, or recovery work.