James Baldwin comes into the spotlight once again due to the release of his FBI files, Raoul Peck‟s 2016 documentary I Am Not Your Negro, and the Black Lives Matter movement. Baldwin is an inevitable figure when it comes to African-American identity. This paper examines racial relations and the African-American identity formation in the United States from James Baldwin‟s point of view. By examining some of Baldwin‟s works, I clarify the exceptional importance of his contribution to the African-American quest for identity. While exploring various kinds of identities, both through his fiction and non-fiction, Baldwin was able to convey the struggles of African-Americans on the path of identity formation in their own country. Baldwin wrote out of his own experience, which makes his contribution even more valuable. Due to experiencing it himself, Baldwin was able to illustrate the effect that race, religion, social status, and sexuality have on identity formation (both individual and collective). Through exploration of Baldwin‟s fiction and a variety of characters, I try to show two different approaches to African-American identity formation – the African-American identity inside the African-American community and the African-American identity in the context of American society. In order to understand his fictional works better, Baldwin‟s non-fiction must be taken into account. Reading his essays is almost like reading his autobiography, which is the perfect framework for further exploration of his works. By always being one step ahead of his time, Baldwin was successful in making his works timeless.