Transsexuals have the strong feeling, often from childhood onwards, of having been born the wrong sex. The possible psychogenic or biological aetiology of transsexuality has been the subject of debate for many years. Here we show that the volume of the central subdivision of the bed nucleus of the stria terminals (BSTc), a brain area that is essential for sexual behaviour, is larger in men than in women. A female-sized BSTc was found in male-to-female transsexuals. The size of the BSTc was not influenced by sex hormones in adulthood and was independent of sexual orientation. Our study is the first to show a female brain structure in genetically male transsexuals and supports the hypothesis that gender identity develops as a result of an interaction between the developing brain and sex hormones.