After seeing people's differing view on transsexualism, I figured it would be interesting to try and explore the scientific literature concerning this phenomenon. Mainly, how it originates (possible causes) and how much is nature vs. nurture, and the current treatment options available and their effectiveness comparatively.
I've only used Google Scholar to find this literature. I also tried excluding older studies since they'll likely be references in newer literature and are likely outdated.
Also worth mentioning that I haven't looked in-depth in any of the studies presented here, so forgive me if I include some bad studies and/or interpret them wrong in the conclusion.
Origin
To start, let's find out approximately how many people are transgender.
>How many people are lesbian, gay, bisexual, and transgender?
https://escholarship.org/uc/item/09h684x2
>[…] an estimated 0.3% of adults are transgender
Now for possible causes.
>Transsexualism: A review of etiology, diagnosis and treatment
http://www.sciencedirect.com/science/article/pii/S0022399998000853
>A first indication of anatomic brain differences between transsexuals and nontranssexuals has been found. Also, certain parental (rearing) factors seem to be associated with transsexualism. Some contradictory findings regarding etiology, psychopathology and success of SRS seem to be related to the fact that certain subtypes of transsexuals follow different developmental routes. The observations that psychotherapy is not helpful in altering a crystallized cross-gender identity and that certain transsexuals do not show severe psychopathology has led clinicians to adopt sex reassignment as a treatment option. In many countries, transsexuals are now treated according to the Standards of Care of the Harry Benjamin International Gender Dysphoria Association, a professional organization in the field of transsexualism. Research on postoperative functioning of transsexuals does not allow for unequivocal conclusions, but there is little doubt that sex reassignment substantially alleviates the suffering of transsexuals. However, SRS is no panacea. Psychotherapy may be needed to help transsexuals in adapting to the new situation or in dealing with issues that could not be addressed before treatment.
>The endocrinology of transsexualism: A review and commentary
http://www.sciencedirect.com/science/article/pii/0306453090900417
>Testicular hormones play a decisive role in the sexual differentiation of the genitalia. There is now also an impressive body of knowledge, gathered predominantly from laboratory animals, of the influence of gonadal steroid hormones on the prenatal/perinatal sexual differentiation of the brain. The well-documented mechanisms in animals have been extrapolated, sometimes dogmatically, to the development of sexual orientation and gender identity/role in humans. In principle, it is doubtful that an animal model of human gender identity can be found. Studies in humans have shown that levels of circulating sex steroids and estrogen feedback on luteinizing hormone do not differ between transsexuals and controls.
>Anthropometrical Measurements and Androgen Levels in Males, Females, and Hormonally Untreated Female-To-Male Transsexuals
http://link.springer.com/article/10.1023/A:1024506427497
>Sexual differentiation of the human brain: relevance for gender identity, transsexualism and sexual orientation
http://informahealthcare.com/doi/abs/10.1080/09513590400018231
>[…] observations in human subjects with genetic and other disorders show that direct effects of testosterone on the developing fetal brain are of major importance for the development of male gender identity and male heterosexual orientation. Solid evidence for the importance of postnatal social factors is lacking. In the human brain, structural differences have been described that seem to be related to gender identity and sexual orientation.
>The microstructure of white matter in male to female transsexuals before cross-sex hormonal treatment. A DTI study
http://www.sciencedirect.com/science/article/pii/S0022395610003250
>Our results show that the white matter microstructure pattern in untreated MtF transsexuals falls halfway between the pattern of male and female controls. The nature of these differences suggests that some fasciculi do not complete the masculinization process in MtF transsexuals during brain development.