Policymakers have debated how schools should respond when transgender students (students who are assigned one sex at birth but identify with the opposite sex) seek to use facilities or participate in school activities consistent with their gender identity. One prominent area of contention is the participation of transgender athletes in school sports. Some states and local school districts allow student-athletes to compete on teams that align with their gender identity, while many states and localities require students to compete on teams aligned with their sex assigned at birth (often referred to as "biological sex"). Some of these policies only prohibit transgender women and girls (who were assigned male at birth but identify as female) from participating on teams designated for women or girls by requiring all participants to be "biologically female," though some policies apply to both men's and women's teams. Transgender student-athletes and their parents have contested policies that require participation according to biological sex, claiming that they discriminate on the basis of sex and/or transgender status in violation of Title IX of the Education Amendments of 1972 (Title IX) and the Equal Protection Clause of the Fourteenth Amendment. By contrast, some "cisgender athletes" (individuals who identify with the sex they were assigned at birth) have used these same laws to challenge policies that permit transgender students to play sports consistent with their gender identity, arguing that such policies deprive them of equal athletic opportunities. This report begins by briefly describing the range of approaches that states, school districts, and athletic associations have adopted with respect to the participation of transgender athletes in sports. It continues by examining the background constitutional and statutory bases that transgender students have used to challenge restrictive policies in areas beyond athletics, such as bathroom access, as those legal principles are informing how courts address challenges to policies regarding athletics participation. With these background concepts in mind, the report then discusses legal challenges to policies and laws that address transgender student-athletes' participation in school sports. After the report identifies trends in how federal district and appellate courts have ruled in lawsuits challenging both restrictive and permissive policies, it addresses the potential for Supreme Court involvement. The report concludes by identifying several considerations for Congress. The report is followed by a table of state laws that regulate the participation of transgender students in school sports.