A kathoey or katoey (in Thai กะเทย) is a Thai term that refers to male-assigned people who exhibit varying degrees of femininity. A significant number of Thais, including many kathoeys themselves, perceive kathoeys as belonging to a third gender (เพศที่สาม, phet this sam). Others see them as either a kind of man or a kind of woman (สาวประเภทสอง, sao praphet song: "a second kind of woman"). It is most often rendered as ladyboy in English conversation with Thais and this latter expression has become popular across South East Asia. The term "kathoey" may be considered pejorative.
Many kathoeys dress as women and undergo "feminizing" medical procedures such as breast implants, hormones, silicone injections, or Adam's apple reductions. Others may wear makeup and use feminine pronouns, but dress as men.
Many kathoey work in entertainment and tourist centers, as dancers, in cabaret shows (Alcazar and Tiffanys in Pattaya being among the best known ones) or as prostitutes. There are also persistent reports of groups of kathoey working as pickpockets in tourist areas. Kathoey working in regular occupations are not uncommon; some of them are valued beauticians or hair stylists.
Compared to Western countries, where transgender and transsexuals are just beginning to become visible (and demand their rights), kathoey are much more visible and more widely accepted in Thai culture: several popular Thai models, singers and movie stars are kathoey, and Thai newspapers often print photos of the winners of female and kathoey beauty contests side by side. The phenomenon is not restricted to urban areas; there are kathoey in most villages, and kathoey beauty contests are commonly held as part of local fairs.
Some believe that this higher acceptance is due to the nature of the surrounding Buddhist culture, which places a high value on tolerance. A possible explanation for the high number of kathoey is the fact that open male homosexuality is a much more recent and less visible phenomenon in Thailand; becoming a kathoey might thus be a solution for a number of male homosexuals. However, kathoey generally seek male sexual partners who identify themselves as heterosexual and not as gay.
The lives of kathoey are not as easy as many Westerners might believe. Families (and especially fathers) are typically disappointed if a son becomes a kathoey. Legal recognition of kathoey is non-existent in Thailand: even after genital reassignment surgery, they are not allowed to change their legal sex. (Compare Legal aspects of transsexualism). Kathoeys are also estimated to have been one of the groups that suffered most from the Indian Ocean earthquake, having far less familial support and recourse to government help than most other groups in society. Further, kathoey often belong to lower social classes, and their suicide rate is significantly higher than that of the general population.
The term "kathoey" is occasionally also used for effeminate male homosexuals who don't cross-dress, and "kathoey-saloey" is a pejorative slang term for these people, roughly equivalent to the English "faggot" (as used in US English). 
In 1996, a kathoey education student murdered a young woman. This was followed by negative coverage of kathoey in the Thai press; the Rajabhat Institutes (teacher training colleges) then closed their doors to all kathoey. The decision had to be reversed after protests by gay, lesbian and feminist groups.
In 1996, a volleyball team composed mostly of gays and kathoey, known as the "Iron Ladies", won the Thai national championship. The Thai government, concerned with the country's image, then barred two of the kathoey from joining the national team and competing internationally.
Among the most famous kathoey in Thailand is Nong Tum, a former champion kick boxer. She was already cross-dressing and taking hormones while still a popular boxer; she would enter the ring with long hair and makeup, occasionally kissing a defeated opponent. Her career ended in 1999 when she had genital reassignment surgery.
Ladyboys is a 1992 documentary film made for Channel 4 TV and directed by Jeremy Marre. It relates the story of two teenage kathoey who prepare for and enter a rural beauty contest and then leave for Pattaya to find work in a cabaret revue.
The story of the Iron Ladies volleyball team underlies the successful 2000 movie The Iron Ladies and the 2003 sequel The Iron Ladies 2.
The 2002 Thai film Saving Private Tootsie tells the story of a group of gays and kathoey who have to be rescued after a plane crash in rebel-held jungle territory. The film explores anti-gay attitudes in various ways. It is loosely based on an incident in December 1998 when a group including a popular singer and his kathoey makeup artist survived a plane crash.
The life of the kathoey kick boxer Nong Tum is related in the 2003 movie Beautiful Boxer.
- Andrew Matzner: In Legal Limbo: Thailand, Transgendered Men, and the Law, 1999. Criticizes the common view that kathoey are fully accepted by Thai society.
- Andrew Matzner: Roses of the North: The Katoey of Chiang Mai University, 1999. Reports on a kathoey "sorority" at Chiang Mai University.
- Transgender Asia including several articles on kathoey
- An insight into ladyboys, by Christos
- Thailand's "Women of the Second Kind"
- E.G. Allyn: Trees in the Same Forest, 2002. Description of the gay and kathoey scene of Thailand.
- Chanon Intramart and Eric Allyn: Beautiful Boxer, 2003. Describes the story of Nong Tum.