Abstract: The growing visibility of trans and gender-nonconforming individuals paved the way for a novel politics of transgender recognition in the legal sphere and state-governed public policies. Considering that the possibilities for registering multiple genders beyond male or female are taking effect in several countries, this article examines recent developments and claims that recognition is complicit with misrecognition for two main reasons. Firstly, because models of recognition tend to equalize all the interactions and all the fields of social life. Drawing on Axel Honneth’s notion of spheres of recognition, I argue that inasmuch as different forms of recognition (legal, moral, affective) are governed by different norms and gender regimes, the dynamics of recognition produce misrecognition. Secondly, because legal and institutional recognition tends to reify individual identity. Drawing on Nancy Fraser’s critique of the identity model of recognition, I contend that the identity recognition model tends to impose a norm rather than recognizing diversity. Therefore, gender identity categories can—through a process of reification—block the entitlement to affirm one’s self-determined gender identity. The paradoxical dynamics of recognition are empirically illustrated through an analysis of third-gender markers and their effects upon the lives and narratives of trans and gender-nonconforming individuals. By examining the case of Nepal in comparative perspective with other developments in Asia and South America, it is demonstrated that the identity model of recognition is complicit with feelings and practices of misrecognition.