Although published in 1966, 43 years ago, much of what it says is true even today. From Chapter 5:
The possible origin of transsexualism is not discussed in the medical literature very often or in very much detail. Most frequently, there is the simple statement that the cause is unknown.*SIGH* It's still true today. Maybe even more so, as the issue has become to some degree politicised, with the Religious Right in the US having far more say than they did in 1966.
The two principal theories are concerned either with possible organic, that is, biological (inborn) causes not necessarily inherited, or - much more often - with purely psychological ones.
Biologically minded authors are likely to consider TVism and TSism as "intersexual" phenomena but those are almost exclusively European scientists.
In this country, psychology and psychoanalysis still dominate the field of sexual deviations. Many psychologists, particularly analysts, have little biological background and training. Some seem actually contemptuous of biological facts and persistently overstate psychological data, so much so that a distorted, one-sided picture of the problem under consideration results.
Psychiatrists with biological orientation strongly disagree and even decry the exclusive psychoanalytic interpretations. But their voice is heard too rarely.
There's a clue that IPSR (idiopathic partial sex reversal) and subclinical Intersex conditions amongst TSwomen are under-reported.
A possible endocrine cause of transsexualism has been investigated in a few cases with great thoroughness. Beyond a few suspicious findings, no definite proof has as yet been found. It may or may not have an endocrine significance that among my 152 male transsexuals, nearly 40 per cent were found to have more or less distinct signs of a degree of sexual underdevelopment (hypogonadism), as was mentioned previously. In such a condition, the pituitary as well as the gonads may be at fault with, of course, an inborn reason behind it.Just like yours truly. *SIGH* yet again. The first description of something resembling my own situation was in 1960.
A few years ago the American psychiatrist, Robert J. Stoller, and his collaborators  reported the case of an evidently transsexual man who had a typically feminine body build with feminine hair distribution, but with testes and a normal penis and without internal female organs as revealed through laparotomy. Nevertheless, there was "evidence of continuing estrogen influence from a source which has not been determined . . . The microscopic examination of testicular tissue has failed to reveal estrogen producing cells."
Schwabe and his collaborators, however, reported shortly afterward that in another, probably transsexual male, large amounts of estrogen (more than double the normal) were found in the testes. The hormone-producing Leydig cells were held responsible for this estrogen production.And we have two separate etiologies, one where the leydig cells were abnormal, and one still idiopathic. That's consistent with the 4 conjectured etiologies we have today.
The evidence for a neurological basis was even stronger back then than I thought too.
Another interesting observation, neither genetic nor endocrine, but nevertheless organic, was made some years ago by three American public health physicians, Drs. E. G. Williams, J. D. Reichard, and M. Pescor. It concerned the reaction of the nervous system to Prostigmin, a rather powerful drug that acts directly on the nerves.Sometimes I think we're going backwards, not forwards. None of this has been followed up, the funding for research on the subject dried up completely in the USA, and in Canada, "Jurassic Clarke" continues to adduce ever more complex psychological hypotheses based on ever more tenuous "evidence", completely ignoring the work in this area. The split between the Biologists and the Psychologists is greater now than ever before.
Normal males and females react alike. So do homosexual males. The drug, however, had no affect at all on the nerves of "feminine men." According to the authors, this may indicate a possible inborn physical trait having to do with an enzyme that takes part in the chemical reaction through which nerves stimulate muscular action.
To the best of my knowledge, these experiments have not been repeated as yet and therefore no confirmation or elaboration of the observation is available. In the light of the following paragraphs, however, they seem to gain particular significance.
Related to the genetic as well as the endocrine possibilities of etiology is a most recent one, coming from Williarn C. Young  and his group at the Oregon Regional Primate Research Center. It may be termed the neural or cerebroneural one. The neural structures and brain centers are the "target," that is to say, receiving organs for hormonal influences. Their genetic quality can decide how these hormones may affect them.
The Oregon group, working largely with monkeys, point to the "mechanism of hormonal action in organizing the tissues of the central nervous system." They say, "Evidence has accumulated indicating that the gonadal hormones have a broad role in the determination of (sex) behavior" through their "differentiation or organization of neural tissues."
The possibility of other organic causes may be thought of, such as early encephalitic infections or brain injuries at birth, but no evidence along such lines has as yet been found.And here was I thinking that the first evidence came in in 1996, from the autopsies performed by Gooren et al. In fact, it was over 30 years earlier. *SIGH*
However, a report recently came from Dr. Roger A. Gorsky of the Brain Research Institute of the University of California at Los Angeles that may prove to be of greatest importance. Dr. Gorsky, as reported in Science Newsletter  found that at least a portion of the brain, known as the hypothalamus, is inherently feminine.
"Unless there is testicular tissue secreting testosterone during this period of development to organize this portion of the brain along masculine lines, it remains forever feminine."
Since the hypothalamus has much to do with the regulation of the pituitary function, secondary endocrine anomalies could well occur.
 Stoller, R. J., Garfinkel, H., and Rosen, A. C., "Passing and the Maintenance of Sexual Identification in an Intersexed Patient." A.M.A. Archives General Psychiatry, Vol. 2, April 1960, pp. 379-384.
 Schwabe, A. D., et al., Pubertal Feminization in a Genetic Male with Testicular Atrophy and Normal Urinary Gonadotropin," J. Clinical Endocrinology and Metabolism, Vol. 22, August 1962, pp. 839-845.
 "Homosexuality: A Biological Anomaly," J. Nervous & Mental Diseases, Vol. 99, No. 65, January 1944.
 Young, William C., Goy, Robert W., Phoenix, Charles H., "Hormones and Sexual Behavior," Science, Vol. 143, No. 3603, January 17, 1964.
 Science Newsletter, August 28, 1965.
Now let's move on to the very recent draft proposal put out by the Endocrine Society, Endocrine Treatment of Transsexual Persons: An Endocrine Society Clinical Practice Guideline.
In summary, neither biological studies nor psychological studies provide a satisfactory explanation for the intriguing phenomenon of gender identity disorders. In both disciplines, studies have been able to correlate certain findings to gender identity disorders, but the findings are not robust and cannot be generalized to the whole population.In other words, "more data needed". I think they're being rather conservative regarding the biological evidence, and giving the psychological evidence rather more credence than it deserves. There is one interesting fact though if we're to consider a psychological cause:
One study investigating the need for psychotherapy for sex reassignment applicants, based on questionnaire scores, suggests that ‘classical’ forms of psychotherapy prior to medical interventions are not needed in about two thirds of the applicants (Seikowski 2007).So 2/3 of people with this "mental illness" don't show any signs of being "mentally ill" from the results of objective tests. No more need be said.
Seikowski K 2007 Psychotherapy and transsexualism. Andrologia 39:248-252