Transgender youth face unique and complex issues as they confront cultural expectations of gender expression and how these fit with what is natural for them. Striving for balance, learning to cope, questioning, and eventually becoming comfortable with one's gender identity and sexual orientation are of paramount importance for healthy growth and development. Ineffective management of intense challenges over time without adequate social support places youth at risk for a number of unhealthy behaviors, including risk behaviors associated with acquiring HIV. This article explores early foundations of gender identity development, challenges in the development of transgender youth, and the limited data that exist on transgender youth and HIV risks. The concept of resilience is introduced as a counterbalancing area for assessment and intervention in practice and future research with transgender youth.