Among transgender and gender diverse people, psychological gender affirmation is an internal sense of valuing oneself as a transgender or gender diverse person, being comfortable with one's gender identity, and feeling satisfied with one's body and gender expression. Gender affirmation can reduce gender dysphoria and mitigate deleterious health effects of marginalization. We sought to create an instrument to measure psychological gender affirmation among transgender women. Following initial item development using qualitative interviews, we used self-administered survey data from two distinct samples ( = 278; = 368) of transgender women living with HIV in the USA. We used data from Study 1 to perform exploratory factor analysis (EFA) and data from Study 2 to perform confirmatory factor analysis (CFA), yielding the five-item single-factor Psychological Gender Affirmation (PGA) scale with high reliability (α = 0.88). This scale is psychometrically sound as demonstrated by its convergent and discriminant validity via correlations with select measures and by its predictive validity through associations in hypothesized directions with measures of mental health and substance use. The PGA scale will aid research on psychological gender affirmation that can in turn inform interventions as well as gender-affirming clinical and social practices to promote the health and well-being of transgender and gender diverse people.