Islamic officials last week detained 16 transvestites competing in the "Miss Universe Asia 2008" contest at a beach resort hotel in the northeastern state of Kelantan, which is ruled by the fundamentalist PAS party.
PAS, which has ambitions of turning Malaysia into a theocratic state under Islamic rule, has made headlines for banning skimpy clothes and enforcing laws on separate male and female queues in shops.
Mohamad Abdul Aziz, chief assistant director of enforcement in the state, told AFP that four transvestites were found guilty by the Islamic Sharia court.
"Four of them were charged in the Sharia court Sunday for wearing female outfits. The court found them guilty and imposed a seven-day jail sentence and a fine of 1,000 ringgit (310 dollars)," he said.
"But they appealed against the jail sentence and the court freed them on bail."
Mohamad said one transvestite was released because "he wore a Malay traditional outfit."
"The other 11 who were wearing evening gowns will be charged on August 24. They are also on bail," he added.
Mohamad said the beauty contest attracted many participants because the first prize was a trip to Indonesia's island resort of Bali. He said it was the first time that authorities had made such a mass arrest in the state.
Mohamad said another group of 50 transvestites who were preparing to join the competition managed to escape arrest. About 300 people were at the hotel to watch the event.
The New Straits Times reported that most contestants were teachers and bank employees.