Those found guilty face up to two years in prison.
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Rights groups have long complained about unclear guidelines on the issue, citing cases where transgender people exempted from military service were later sued on charges of faking their gender identity to avoid the draft.
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The Center for Military Human Rights in Korea, a watchdog based in Seoul, the South Korean capital, that monitors rights violations within the military, publicized the case of the transgender staff sergeant last week.
Gay men and lesbians are not barred from service, but they have been subject to investigations by military officials. Gay and transgender soldiers in the military have long complained more welcoming to transgender people. Human rights groups have said the military needs to be of discrimination and abuse.