Facebook added a customizable feature with about 50 new terms for people to use to describe their gender.
Facebook said it worked with leading LGBT advocacy organizations to come up with the list of gender identities, including androgynous, bi-gender, intersex, gender fluid or transsexual.
Users also now have the option to select the pronoun they prefer to be referred to publicly — he/his, she/her or they/their.
"We want you to feel comfortable being your true, authentic self," according to Facebook's diversity webpage.
Facebook has nearly 1.2 billion users worldwide. Users who want to keep their gender private can still do so.
The new feature was welcome news for advocacy groups.
For transgender people, the new feature "allows them to tell their authentic story in their own words," said Sarah Kate Ellis, president of GLAAD, a gay, lesbian and transexual advocacy organization, in a statement.
The online response has also been mainly positive.
However, not everyone agrees with Facebook's decision to add the feature.
"Of course Facebook is entitled to manage its wildly popular site as it sees fit, but here is the bottom line: It's impossible to deny the biological reality that humanity is divided into two halves — male and female," said Jeff Johnston, an issues analyst for Focus on the Family, an influential national religious organization based in Denver, in an interview with the AP.