BACKGROUND: Pediatric gender identity has gained increased attention over the past several years in the popular media, political arena, and medical literature. This article reviews terminology in this evolving field, traditional models of gender identity development and their limitations, epidemiology and natural history of cross-gender identification among children and adolescents, co-occurring conditions and behaviors, research into the biological and psychosocial determinants of cross-gender identification, and research into the options regarding and benefits of clinical approaches to gender incongruent youth. METHODS: Based on a critical review of the extant literature, both theoretical and empirical, that addresses the issue of pediatric gender identity, the authors synthesized what is presently known and what is in need of further research in order to elucidate the developmental trajectory and clinical needs of gender diverse youth. RESULTS: The field of pediatric gender identity has evolved substantially over the past several years. New research suggests that cross-gender identification is prevalent (approximately 1% of youth). These youth suffer disproportionately high rates of anxiety, depression, and suicidality. Although research into the etiology of cross-gender identification is limited, emerging data have shown that affirmative treatment protocols may improve the high rates of mental health difficulties seen among these patients. CONCLUSIONS: The field of pediatric gender identity has evolved dramatically. Emerging data suggest that these patients' high rates of anxiety, depression, and suicidality appear to be improved with affirmative protocols, although future longitudinal data are needed.