Cross-dressing is not a sin in Shafafi Islam (and neither is Homosexuality). Clothing that is considered masculine in one place can be considered feminine in another. Imagine an Arab man wearing his traditional garb walking around in Europe where his clothing will be considered closer to a traditional woman’s dress.


Even in one geographic location, fashion is ever changing and what is considered feminine today may be considered masculine tomorrow. Skinny and wide-leg jeans are often alternatively popular by gender every few years. Therefore, it is difficult to classify what is considered “female clothing” or “men’s clothing” universally – even today, let alone 1400 years ago.
That being said, deception is lying, which is a sin in Islam. People born as men who pose as women with the intention of fooling men incur a major sin. For example, transgenders born as men setting their profiles as female on Tinder will deceive men who are expecting people born as females only. This is no different than lying and is a sin. If the deception continues to the bedroom, the sin (of sexual abuse) may be so great that God will be hesitant to ever forgive it.
Body changes that permanently damage organs or body structures/functions are forbidden. It is understandable when one is unhappy with their reality. A person may be born a female and have gender dysphoria (unhappiness with their birth sex). This female may pretend to be a male (gender) but can never change their DNA (sex). There are limits to pretending. Wearing make-up, haircuts, clothing fashion, body posture, and other non-permanent augmentations/changes are allowed. However, surgical alterations that destroy original functioning are not allowed. In fact, people who feel the need to do this should be referred for psychiatric assessment.
Unconvinced? Let us take an example to highlight the limits of transgenderism. You are born a human being and as much as you are unhappy with this fact, you cannot change your species to a dolphin. You may dress up like a dolphin, even try to talk like a dolphin, wax your whole body of hair, and go swimming often, and “identify” as a dolphin, but you must understand that you cannot change your DNA and change your species to actually become a dolphin. There are limits to playing pretend. You may be tempted to surgically transform your legs into a dolphin tail, implant a dorsal fin on your back, and cut off your arms, but you will still not be a dolphin. You will be a human playing extreme pretend.
In human civilization, when we see somebody self-harming, we try to stop it. Self-harm is usually done due to dysphoria (unhappiness) or schizophrenia (illusions). Physically damaging one’s body by permanently damaging surgical alteration, sex phenotype-altering hormonal medication, or inserting sewing needles into one’s body is usually met with concern by society. People consider this self-harming and the sufferer must seek psychiatric help.