Gender Identity: One's internal, personal sense of being man or woman (or boy or girl).  For transgender people, their birth-assigned sex and their own internal sense of gender identity do not match.

Gender Expression: External manifestation of one's gender identity, usually expressed through masculine, feminine, or gender variant behavior, clothing, haircut, voice or body characteristics.  Typically, transgender people seek to make their gender expression match their gender identity, rather than their birth-assigned sex.

Transgender: An umbrella term for people whose gender identity and/or gender expression differs from the sex they were assigned at birth.  The term may include but is not limited to: transsexuals, cross-dressers, and other gender-variant people.  Many transgender people can identify as female-to-male (FTM) or male-to-female (MTF).  Use the descriptive term (transgender, transsexual, cross-dresser, FTM or MTF) preferred by the transgender person.  Transgender people may or may not choose to alter their bodies hormonally and/or surgically.

Transsexual: An older term which originated in the medical and psychological communities.  Some transsexual people still prefer to use the term to describe themselves.  However, unlike transgender, transsexual is not an umbrella term, and many transgender people do not identify as transsexual.  It is best to ask which term an individual prefers.

Source: GLADD, The Gay & Lesbian Alliance Against Defamation