There is an increasing interest among Iranian youth in using internet and cyberspace. Due to the widespread use of internet in different plats of the country, including less developed areas, the consequences of such phenomenon deserve much attention. Though the development of modern media can bring about both positive and negative consequences, the present paper attends only to the negative ones, i.e. the resulting identity crisis. In particular, it focuses on identity crisis at the individual, group, social, ethnic and religious levels. At the same time, the author focuses on identity changes and the resulting crisis of using modern media, in particular cyberspace.First, identity, crisis and cyberspace are defined; next, identity crisis and the related theories are reviewed, At the end, based on the available research. The possibility of the crisis will be investigated in Iran. The investigations reveal that, based on a classification of generations, the third generation interacts more with the internet; hence, they are more probable to suffer from its negative consequences, in particular identity crisis. At the same time, there appear some signs of the identity crisis at the individual ethnic level. Further, it was found that the modern media has made lots of changes in the sources based on which people's identity was formed. Another finding is that a number of networks are being formed based on the users' ethnic groups. Moreover, some changes are taking place in the way users attribute themselves to the ethnic and national identities. It seems such identity changes paves the way for other types of crisis in the country.