"person with a strong desire to dress in clothing of the opposite sex," 1922, from German Transvestit (1910), coined from Latin trans "across, beyond" (see trans-) + vestire "to dress, to clothe" (from PIE *wes- (2) "to clothe," extended form of root *eu- "to dress").
As an adjective from 1925. Transvestism is first attested 1928. Also see travesty, which is the same word, older, and passed through French and Italian; it generally has a figurative use in English, but has been used in the literal sense of "wearing of the clothes of the opposite sex" (often as a means of concealment or disguise) at least since 1823, and travestiment "wearing of the dress of the opposite sex" is recorded by 1832. Among the older clinical words for it was Eonism "transvestism, especially of a man" (1913), from Chevalier Charles d'Eon, French adventurer and diplomat (1728-1810) who was anatomically male but later in life lived and dressed as a woman (and claimed to be one).