• The dictum that transsexualism is resistant to psychotherapy has led many investigators to view sex reassignment surgery (SRS) as the treatment of choice and dismiss psychotherapy as unfeasible. The Gender Identity Clinic at Case Western Reserve University, Cleveland, was organized to treat transsexuals with individual and group psychotherapy and SRS. Of 50 gender dysphoric (GD) patients, 70% have adjusted to nonsurgical solutions, 20% are receiving treatment, and 10% have received SRS and psychotherapy. The crux of psychotherapy is establishing a therapeutic alliance; this is aided by the context of the Gender Identity Clinic. Clinical evidence suggests that new therapeutic techniques may enable psychotherapy to become the treatment of choice with most GD patients and that psychotherapy and SRS are not mutually exclusive. Most patients request and benefit from psychotherapy after SRS.