The finding strengthens the view that there is a biological reason why some people feel they are living in the wrong body, in this case men who have an strong desire to live as a woman.
Vincent Harley, of Prince Henry's Institute in Melbourne, said it was the largest every study of transsexuals and that his team's study covered 112 Australian and American male-to-female transsexuals.
The Australian and American team examined three sex hormone genes. They found male-to-female transsexuals tended to have a longer version of the androgen receptor gene, which could reduce testosterone action.
"It is possible that a decrease in testosterone levels in the brain during development might result in incomplete masculinisation of the brain in male-to-female transsexuals," Associate Professor Harley said.
But he also hastened to add that it was highly likely that other genetic factors were also involved in this form of transsexualism.
The research confirmed that transsexuality was not a lifestyle decision, as some had suggested, said another team member, Trudy Kennedy, the director of the Monash Gender Dysphoria Clinic in Melbourne.
"People who come to our clinic describe how they knew they were different at a very early age, just three or four years old. This is something that people are born with," Dr Kennedy said.
The research was trying to solve the "fascinating" question of why people felt a particular gender was important, but it might also lead to practical benefits in future, if genetic tests could inform decisions about which sex children, born with ambiguous genitalia, should be raised.
The findings, which are published in the journal Biological Psychiatry
, were good news, said Sally Goldner, 43, who had an inner sense she was female from a young age, despite being a boy. "Such compelling evidence dispelling the total myth of gender identity issues being a choice is always welcome," she said.
Ms Goldner, a spokeswoman for TransGender Victoria, said she assumed she just had a vivid imagination as a child when she thought of herself as female. It was not until she was 29, after she had had a bad experience with a psychiatrist, that she was accurately informed about transsexualism by a different expert.
"It was incredible. It was the first time I could remember waking up and feeling peace and calm in 20 years," she said.
Juliet Richters, an associate professor in sexual health at the University of New South Wales, said much of the distress felt by transsexuals was caused by cruel treatment from others.
"A little more tolerance towards everyone who doesn't conform to gender norms would be a good thing," she said.