Most previous identity research has focused on relationships between identity synthesis, confusion, and psychosocial problems. However, these studies did not take into account Erikson’s notion of identity consolidation, that is, the dynamic interplay between identity synthesis and confusion. This study aimed to examine longitudinal relationships and the directionality of the effects between identity consolidation and psychosocial problems during adolescence, using two waves of longitudinal data from 793 Japanese adolescents (49.7% girls; ages 13–14 and 16–17 at Time 1). A bi-factor latent change model revealed that levels and changes in identity consolidation were negatively associated with levels and changes in psychosocial problems. Furthermore, a bi-factor cross-lagged effects model provided evidence that identity consolidation negatively predicted psychosocial problems, and vice versa. Our study facilitates a better understanding of the importance of identity consolidation in the relations between identity components and psychosocial problems.