Nurturing, maintaining and supporting positive identity formation for children and young people in residential child care is an under researched area. Reasons for this are varied not least the fact that residential child care is still often not perceived as a positive choice for children and young people. Concerns about cost, value for money, the quality and effectiveness of care have been exacerbated by findings from recent national and international government commissioned Inquiries into allegations of historical abuse experienced by children and young people in residential child care. Their findings raise serious questions about whether residential care can ever be a positive choice, whether it can offer high quality care that promotes social, emotional and psychological wellbeing and in particular whether it can nurture and support positive identity formation. Using an adaptation of Honneth’s recognition theory and applying it to residential child care practice, this paper contributes to the growing body of work which argues that residential child care is a positive choice and that it has a key role to play in positive identity formation. The paper ends with some thoughts regarding implications for policy and practice.