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The study investigated perceived religious discrimination and three facets of Muslim identity (psychological, behavioural, and visible) as predictors of psychological well-being (life satisfaction and psychological symptoms) of 153 Muslim women in New Zealand. The results indicated that although visibility (wearing hijab) was associated with greater perceived discrimination, it predicted positive psychological outcomes. Analysis further revealed that the psychological (pride, belongingness, and centrality) and behavioural (engaging in Islamic practices) facets of Muslim identity moderated the relationship between perceived religious discrimination and well-being. A strong psychological affiliation with Islam exacerbated the negative relationship between perceived religious discrimination and well-being. Conversely, engaging in Islamic practices buffered the negative impact of discrimination. The research highlights the complexity of Muslim identity in diasporic women.