The transgender phenomenon is a significant global issue, sparking debate among Muslims and challenging traditional religious interpretations. This article examines the perspectives of two Islamic scholars. Buya Hamka, a conservative Indonesian scholar, upholds a literal interpretation of the Quran and Hadith, viewing gender change as violating Allah’s decree. In contrast, Amina Wadud, a progressive American scholar, advocates for a contextual interpretation emphasizing justice, humanity, and gender identity acceptance. Their differing approaches highlight Islam’s spectrum of thought, from conservative to inclusive. This article explores the theological and social implications of their views and their relevance in modern times. By analyzing both perspectives, it aims to find a middle ground that balances tradition with justice and inclusivity, offering insights into how Islam can address transgender issues today.