Background: How we identify ourselves is strongly related to employment. Young adults are a vulnerable group with regard to entering the Labor market. If they also have mental health problems, entering becomes more difficult and increases risk of early marginalization. Nevertheless, working can be essential for personal recovery process. Aims: To explore experiences of young adults with mental health problems who are starting to work, with a focus on the process of developing work identity. Methods: Grounded theory design was used. The data collection consisted of 13 in-depth interviews with young adults with mental health problems aged 19–26 years, who had worked for at least three months. Results: The experience of starting to work contributed to a process of internal and external change, new feelings, challenges, and understanding of the surrounding world. Former negative thought patterns became more positive. New roles and occupational patterns were developed and altered views on abilities, and thus self-efficacy. This development contributed to a work identity, and new directions in life. Conclusions: There is therapeutic potential in supporting work identity development, and this support can empower the personal recovery process for young adults.