Recent literature on health reform describes advantages of a collaborative approach to the management of health organizations. However, it is important for the managers of health organizations, including nurse managers, to understand that occupational groups adapt to organizational change and policy reform in different ways. These differences to change may have an effect on health reform initiatives, in particular, by potentially limiting the development of collaboration, team work and inter-professional practice. This paper presents fieldwork from a study on health reform and professional identities. Data from focus group discussions are used to discuss the dynamics of reform, the tensions between occupational subcultures and the organization, and changing relations within and between diverse occupational and professional groups. As opposed to much of the literature on professional identity, data for this research suggests that professional identities are changing under the strain of environmental changes to the health system, and associated cultural changes. Professions are not static. In addition, this research found that cultural differences are not limited to occupational groups of doctors, nurses and others, and include differentiation within the medical profession that is based upon specialization, generation, educational background, employment status and feelings of [non]association with the organization. These differences have resulted in cultural ambiguity of sustained and non-sustained fragmentation of occupational and professional groupings that, if not fully understood, are potentially complicating the implementation of change.