BBC News, Kathmandu
The unprecedented legal status was given to 40-year-old Chanda Musalman.
Conservative and religious Nepal, like many Asian countries, has a sizeable community of people who are born male but behave as women.
It is unclear how this unique legal status will play out in practice - for instance, how it will affect Chanda's marriage rights.
Constitution
With elections approaching, government teams are currently touring the country issuing certificates of citizenship.
One team came to Chanda's village in western Nepal.
Chanda, who has had no sex-change surgery, asked the officials to erase the words male and female, listed under gender.
They obliged, and ascribed Chanda's gender as "both".
A local campaign group, the Blue Diamond Society, has thanked the government for the move, which it described as a victory for sexual and gender minorities.
In the past the group has accused both the police and the Maoists of harassing transgendered people in the streets of Kathmandu.
It is now lobbying to get the rights of sexual minorities explicitly protected in the new constitution, to be drawn up after the elections.
