Transgender and gender nonconforming (TGNC) clients often report negative experiences in the receipt of medical and mental health services (Poteat, German, & Kerrigan, 2013; Shipherd, Green, & Abramovitz, 2010; Xavier et al., 2013). Problematic psychotherapy experiences can impact symptom severity, treatment satisfaction, and help-seeking (Bockting, Robinson, Benner, & Scheltema, 2004; Willging, Salvador, & Kano, 2006). The present grounded theory study was conducted with 45 TGNC participants to identify the specific psychotherapy missteps psychotherapists make in working with this group. These themes include education burdening, gender inflation, gender narrowing, gender avoidance, gender generalizing, gender repairing, gender pathologizing, and gate-keeping. Findings indicate that psychotherapists might make errors in overemphasizing, underemphasizing, or stigmatizing TGNC identities in psychotherapy sessions. Psychotherapy missteps also reflected problems related to placing the burden of education on the client, overasserting power, or performing care in a perfunctory manner. Recommendations are discussed for supporting gender diversity in clinical practice and promoting trans-affirmative care. Limitations of the study and directions for future research will also be discussed.