Importance: Gender-affirming surgery is often beneficial for gender-diverse or -dysphoric patients. Access to gender-affirming surgery is often limited through restrictive legislation and insurance policies., Objective: To investigate the association between California's 2013 implementation of the Insurance Gender Nondiscrimination Act, which prohibits insurers and health plans from limiting benefits based on a patient's sex, gender, gender identity, or gender expression, and utilization of gender-affirming surgery among California residents., Design, Setting, and Participants: Population epidemiology study of transgender and gender-diverse patients undergoing gender-affirming surgery (facial, chest, and genital surgery) between 2005 and 2019. Utilization of gender-affirming surgery in California before and after implementation of the Insurance Gender Nondiscrimination Act in July 2013 was compared with utilization in Washington and Arizona, control states chosen because of geographic similarity and because they expanded Medicaid on the same date as California-January 1, 2014. The date of last follow-up was December 31, 2019., Exposures: California's Insurance Gender Nondiscrimination Act, implemented on July 9, 2013., Main Outcomes and Measures: Receipt of gender-affirming surgery, defined as undergoing at least 1 facial, chest, or genital procedure., Results: A total of 25 252 patients (California: n = 17 934 [71%]; control: n = 7328 [29%]) had a diagnosis of gender dysphoria. Median ages were 34.0 years in California (with or without gender-affirming surgery), 39 years (IQR, 28-49 years) among those undergoing gender-affirming surgery in control states, and 36 years (IQR, 22-56 years) among those not undergoing gender-affirming surgery in control states. Patients underwent at least 1 gender-affirming surgery within the study period in 2918 (11.6%) admissions-2715 (15.1%) in California vs 203 (2.8%) in control states. There was a statistically significant increase in gender-affirming surgery in the third quarter of July 2013 in California vs control states, coinciding with the timing of the Insurance Gender Nondiscrimination Act (P < .001). Implementation of the policy was associated with an absolute 12.1% (95% CI, 10.3%-13.9%; P < .001) increase in the probability of undergoing gender-affirming surgery in California vs control states observed in the subset of insured patients (13.4% [95% CI, 11.5%-15.4%]; P < .001) but not self-pay patients (-22.6% [95% CI, -32.8% to -12.5%]; P < .001)., Conclusions and Relevance: Implementation in California of its Insurance Gender Nondiscrimination Act was associated with a significant increase in utilization of gender-affirming surgery in California compared with the control states Washington and Arizona. These data might inform state legislative efforts to craft policies preventing discrimination in health coverage for state residents, including transgender and gender-diverse patients.