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This paper examines the influence of globalization on psychological functioning. It noted that globalization is somehow a vital step toward both a more stable world and better lives for people in it. However, human lives are increasingly being challenged and integrated into larger global networks of relationships. The forces of globalization are taxing the youth, families, and cultural systems worldwide. All social systems are contaminated by the need to borrow values, morals, skills, and competencies from the next regions or nations. The process of globalization and its attendant consequences may lead to a stripping away of culture identity. It will lead to a break down in social interaction within a local context, a vital means that used to build a great sense of cultural identity and belongingness. This is because globalization is speeding up social and cultural processes such that time and space are no longer constrain on human activities. Conditions and social interactions are now organized so as to connect presence and absent others. Then also most people in the world now develop a bicultural identity, in which part of their identity is rooted in their local culture while another part stems from an awareness of their relation to the global culture. Furthermore, there is pervasiveness of identity confusion as local cultures change in response to globalization, some young people find themselves at home in neither the local culture nor the global culture.