Sex dimorphism starts during early embryogenesis and is further manifested in response to hormones during puberty. As this leads to physical divergence that is measurably different between sexes, males enjoy physical performance advantages over females within competitive sport. While this advantage is the underlying basis of the segregation into male and female sporting categories, these sex-based categories do not account for transgender persons who experience incongruence between their biological sex and their experienced gender identity. Accordingly, the International Olympic Committee determined criteria by which a transgender woman may be eligible to compete in the female category, requiring total serum testosterone levels to be suppressed below 10 nmol/L for at least 12 months prior to and during competition. Whether this regulation removes the male performance advantage has not been collectively scrutinized. Here, we aim to review how differences in biological characteristics between biological males and females affect sporting performance and assess whether evidence exists to support the assumption that testosterone suppression in transgender women removes the male performance advantage. In this review, we report that the performance gap between males and females amounts to 10-50% depending on sport. The performance gap is more pronounced in sporting activities relying on muscle mass and strength, particularly in the upper body. Longitudinal studies examining the effects of testosterone suppression on muscle mass and strength in transgender women consistently show very modest changes, where the loss of lean body mass, muscle area and strength typically amounts to approximately 5% after 1 year of treatment. Thus, current evidence shows that the biological advantage enjoyed by transgender women is only minimally reduced when testosterone is suppressed. Sports organizations may therefore be compelled to reassess current policies regarding participation of transgender women in the female category of sport.