Multiple surveys have suggested that transgender individuals show lower sexual well-being than cisgender individuals. Most studies, however, are limited in terms of ecological validity and memory bias and cross-sectional in nature. These issues are less prevalent in diary studies monitoring responses over time at home. For three weeks, 47 transgender ( age = 29.00, = 11.62) and 52 cisgender individuals ( age = 32.90, = 11.44) reported daily on their sexual behavior, sexual esteem and body image. Using multilevel model analyses, we investigated the daily associations between these variables, and addressed differences between transgender and cisgender individuals. We found that in transgender individuals, intimacy predicted sexual esteem; sexual openness predicted sexual esteem and body image; and sexual esteem predicts intimacy, masturbation, and sexual openness on the daily level. While transgender individuals scored lower on daily sexual esteem and body image than cisgender individuals, groups did not differ in daily sexual behavior. They also did not differ in any of the predictive relations described above, but we did find that the association between masturbation and body image was moderated by a cisgender identity, and sexual esteem predicted sexual activity more positively in cisgender compared to transgender individuals. These results complement findings from cross-sectional studies and indicate how transgender individuals struggling with sexuality can increase sexual openness. Implications for clinical practice are that clinicians discussing sexuality with their transgender patients should not define sexual activity too narrowly, and that sexual esteem might be a relevant factor in determining sexual behavior.