A transgender person (or "trans person", for short) is anyone whose actual gender (i.e. the gender the person knows themselves to be) is different from the one assigned to them (by doctors, etc.) at birth. People who aren't trans are called "cis".

Trans people are absolutely the gender they say they are. For example, if someone says they are a woman, then they are actually a woman.

Reread the first sentence of point #2 at least 10 more times.

Being transgender isn't a choice. Trans people don't choose their genders any more than cis people do.

Treat a trans person exactly the same way you would treat cis person of the same gender (and remember, a trans person's gender is always whatever they say it is).

Use whatever name and gendered words (pronouns, etc.) a trans person wants you to use. It doesn't matter how you feel about these words; use them anyway. If you mess up, correct yourself and move on without derailing the conversation. If you find yourself making frequent mistakes, it's up to you to find a way to change your behavior. Even accidents can be hurtful.

Don't draw attention to the fact someone is trans or single them out. Don't even mention that someone is trans without their permission.

Don't ask a trans person any question that would be rude to ask a cis person of equal social familiarity. That means unless you know a person really well, questions about their body probably aren't okay.

Unless they tell you otherwise, assume a trans person has always been their stated gender, even before they publicly identified as trans. Use their current name and gender in all contexts, past and present.

Don't say anything to a trans person that would be inappropriate to say to a cis person of the same gender (e.g. "Wow, you look just like a real woman!").

Sexuality and gender are completely different things. Gender is about who someone is. Sexuality is about who someone is attracted to.

Someone's validity as a trans person doesn't depend on how their body looks. A trans person's stated gender is always legitimate, regardless of what bodily changes the person has or hasn't made.

Not all trans people are strictly male or strictly female. Some people (called "non-binary" people) are a combination of male and female, or are something else entirely. Don't refer to non-binary people using binary gendered language. Even common phrases like "ladies and gentleman" can be insulting if directed toward someone who is neither.

If any of what I've said is troubling to you, work through these issues on your own time. Your trans friend is not your therapist, and it's not their job to help you understand your feelings.