“Ibasho” that contains the meanings of both one's “actual living place” and one's “psychological place” plays an important role for a positive evaluation of life (Suzuki, 2009, 2012). However, it is not clear whether “Ibasho” is related to (cultural) identity formation in multicultural environments. This study aims to clarify the relationship among “Ibasho”, cultural identity and mental health. The participants were ten Japanese-German women who have Japanese mother and German father and living in Germany. Repeated interviews had been employed during five years. The results suggested the following: Three types of cultural identities were identified namely, balanced bicultural identity or a predominance of either Japanese or German identity, and “Ibasho” influenced cultural identity formation as well as mental health of multiethnic people. Furthermore, the relationship among “Ibasho”, cultural identity and metal health was illustrated.