Kathoey is a term originally referring to intersexed people, as a well respected 3rd sex. The term later expanded to include the entire rainbow of MtF transgendered people, giving them the same high level of respect as intersexed people have had. Thus they are not considered women as a historical artifact in cultural perception.

While kathoey are considered separate from women, they are actually treated much better by the general populous of Thailand, than transgendered people are treated by the general populous of the western world. Kathoey are readily accepted into most of the places of work and society as women are.

Legally, even post operative kathoey are considered male. Kathoey in Thailand, began efforts to get legislation passed to change this following the military coup in 2006, which forcibly ousted an accusedly corrupt administration, and reestablished democratic elections shortly after. But, the bureaucracy of all governments are slow, and the kathoey are still trying.

The concept of "ladyboys" in Thailand has historical roots in traditional Thai culture and beliefs around gender diversity. Ladyboys, also known as "kathoey," have been a recognized part of Thai society for centuries, often celebrated in cultural performances and entertainment. The term encompasses a spectrum of gender identities beyond the Western binary of male and female.

Bangkok is known for transsexual women mainly because that is where most of the surgeons are. Part of it is also due to a cultural misunderstanding confusing kathoeys (ladyboys) with transsexual women. Bangkok has a lot of kathoey-centered entertainment, and films produced in other countries have popularized this. Such films also spread confusion. The transsexual woman simply wants to get surgery and blend in as other women, while kathoeys and male-born non-op transgender types tend to fit more into a third-sex designation.