Background: Autistic people experience worse mental health outcomes than non-autistic people. Masking (concealing autistic traits) is found to relate to poor mental health. Research shows that autistic people indicate relationships between masking and difficulties creating or maintaining a sense of identity. Personal identity is rarely studied within autism research. This study aims to bridge this gap by exploring the connection between identity formation difficulties (both social and personal) and its impact on poor mental health in autistic people. It examines levels of identity conflict and distress in autistic and non-autistic people and whether identity distress mediates and identity conflict moderates the relationship between masking and psychological distress. Method: Data were collected for autistic (n = 139) and non-autistic people (n = 133) using an online survey. Results: Autistic people were found to experience higher levels of identity distress, conflict, and psychological distress. Identity distress represents a full mediation of the relationship between masking and psychological distress in the autistic cohort, but a partial mediation in the non-autistic cohort. Identity conflict did not moderate any relationships within the model for either cohort. However, it did have a significant direct relationship with masking identity distress and psychological distress. Conclusions: These findings suggest that autistic people may experience worse mental health outcomes due to difficulties with cohesive identity formation. Additional research into the role of autism in identity development may identify other areas in which identity difficulties negatively impact autistic people, such as long-term planning and suicidality.