A positive relationship between ethnic identity and psychological well-being has been widely reported in the literature. However, most work has been conducted among minorities in Western multicultural societies such as the US. Little is known about the salience and consequences of ethnic identity in Middle Eastern countries. We conducted a study in Oman where the strong emphasis on a single Arab identity exists in an ethnically heterogenous environment. We addressed the saliency of ethnic identity and its consequences for well-being. Ou data comes from 563 university and high school students who completed the Phinney's Multi-Ethnic Identity Measure (MEIM), the Brief Multidimensional Students' Life Satisfaction Scale, and the General Health Questionnaire (GHQ-12). Results indicate that the MEIM possesses good psychometric characteristics in this population, implying that the construct is valid in this context. Furthermore, using path analytic procedures and regression analysis we established that ethnic identity, particularly ethnic belonging, was positively associated with psychological well-being (i.e., life satisfaction and mental health), thereby confirming results from other parts of the world. Theoretical and practical implications are discussed.