While the term has been documented in Thai society for centuries, the modern understanding of a ladyboy is specific. Narrowly defined, a ladyboy is an individual with a female psychological identity who may use clothing, hormones, or medical procedures like breast augmentation to develop female physical characteristics but retains male sexual organs. This places them within a gender identity unique to the region.

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In Thailand, the term "ladyboy" is widely used, often without the negative connotations it carries in Western contexts. It refers to a person assigned male at birth who lives as a woman. The preferred Thai term is Kathoey (กะเทย), which describes a recognized "third gender" in Thai culture, distinct from simply being a gay man or a transgender woman.