One of Alfred Hitchcock’s most well-known movies, Psycho (1960) continues to instigate debate and academic scholarship. While this movie was the precursor of many trends, such as the slasher horror genre, it has not escaped controversy. According to John Phillips, Psycho “[provided] the original model of the mentally disturbed cross-dressed murderer” (87) by equating cross-dressing with a form of mental illness so severe that its only logical manifestation is violence. Norman’s gender bending, expressed by dressing and living as his mother, threatens gender binaries, and thus creates a veritable monster. In this article, I will argue that Psycho promotes a transphobic rendering of its main villain, Norman Bates, in order to understand how the movie tries to contain Norman’s transgender identity. Using film studies and queer studies, I will examine Norman as a transgender character, Lila as an embodiment of the Law, and the psychiatrist at the end as a repressing force. Mainly, I will argue that Lila and the psychiatrist function to normalize Norman and to contain his non-normativity.