From what I can remember, someone invents a process on Earth, "present time", whereby a person can be transformed into their "true" selves. The first to undergo the process, which I think takes about a month, are a man and a woman. The man turns into a small flying fairy-like being, and the woman into a Amazon. Others want to undergo the process, but at first just assume that all men will become fairies, and women will become huge muscular Amazons. They "discover" that the process is unique to each individual that tries it, each becoming their true selves. Many are transformed in the book. I think a transvestite became a woman, and others into creatures of all sorts. The book may have been called *Changling(? Transformation? Transformations?
This question appears to me to be describing the novel Converts by Ian Watson. Note that an early form appears as the short story "Jean Sandwich, the Sponsor, and I", referenced in another answer, but the question submitter's statement that "Many are transformed in the book" makes it somewhat clear that he is talking about the novel, not the original short story, since the short story ends before any but the two original transformations have taken place. As can be seen from the short story sample mentioned in the other answer, the short story fits the "giant amazon" and "fairy" transformation, but the novel presumably (I haven't read it) goes further into other transformations as well.
Note also this other question where someone is looking for the short story, not the novel.