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In 1990 the American philosopher and gender theorist Judith Butler published their book Gender Trouble, questioning both the naturalness and the exclusive dichotomy of the male/female binary. Gender Trouble concludes by arguing that continually expanding cultural understandings of sex and gender contradict the idea of sex and gender as binaries and reveals these binaries as unnatural. Butler has publicly identified as non-binary since 2019. They use they/them and she/her pronouns, but prefer to use "they" pronouns.

In the mid-1990s the term "gender queer" emerged in connection with the American transgender rights activist Riki Wilchins, who co-edited of a collection of articles titled GenderQueer: Voices from beyond the Sexual Binary in 2002. Wilchins used the expression as early as 1995 in the In Your Face newsletter to argue against gender discrimination. In 1997, Wichins announced they identify as genderqueer in their autobiography. In 2017, they published a collection of articles entitled Burn the Binary!

In 1997, autism-rights movement activist Jim Sinclair, one of the founders of Autism Network International (ANI), publicly declared themself gender neutral, writing "I remain openly and proudly neuter, both physically and socially" in their 1997 self-introduction to the Intersex Society of North America.

Some non-binary or genderqueer people use gender-neutral pronouns. In English, usage of singular "they", "their" and "them" is the most common; non-standard pronouns—commonly called neopronouns —such as xe, ze, sie, co, and ey are sometimes used as well. Some others use conventional gender-specific pronouns "he" or "she", alternate between "he" and "she", or use only their name and no pronouns at all. Many use additional neutral language, such as the title Mx.

In 2015, a study by the National Center for Transgender Equality surveyed nearly 28,000 transgender people in the United States, 35% of whom identified as non-binary or genderqueer. 84% of survey respondents reported using pronouns that did not match the gender given on their birth certificates. 37% of respondents preferred he/him, 37% preferred she/her, and 29% preferred they/them. 20% of respondents did not ask others to use certain pronouns to refer to them, and 4% used pronouns not given in the survey choices.

Criticism
Scholars have made several criticisms of the third gender concept. These critiques regard primarily Western scholars' use of the concept to understand gender in other cultures in an ethnocentric way. Third gender has also been criticized as a reductionist "junk drawer" used for all identities beyond the Western gender binary, ignoring the nuance of various identities, histories, and practices in other cultures to situate them in a Western understanding. As Towle and Morgan write, "The term third gender does not disrupt gender binarism; it simply adds another category (albeit a segregated, ghettoized category) to the existing two." Towle and Morgan additionally note that Western scholars may incorrectly treat non-Western third gender examples as though they existed prior to and serve as the foundation for modern Western understandings of gender variability. This implication makes it difficult for Western scholars to understand how non-Western cultures view and value sex and gender in their own societies in both the present day and historically.