PurposeThe transgender community faces prejudice and stigma and is one of the most ostracised groups in society. One of the ways to reduce prejudice is through intergroup contact. This may be achieved through direct or indirect contact. The purpose of this paper is to compare the impact of direct and indirect contact on reducing transphobia.Design/methodology/approachDirect contact was achieved through a transgender speaker panel and indirect contact involved a video presentation. In total, 159 students enroled in undergraduate courses at a prominent university in India were enlisted for this study. Perceptions regarding transgenders were measured using the genderism and transphobia scale. Perceptions were measured at three different time points – before the contact, immediately after the contact and one month post contact.FindingsResults indicate that both direct and indirect contact cause a significant immediate decrease in transphobia at the post intervention stage. However, only direct contact caused significant reduction at the follow-up stage (one month after the intervention). Direct contact also effected a greater reduction in transphobia than indirect contact.Research limitations/implicationsThis study extends previous research that shows that speaker panels involving sexual minority speakers can result in reducing stigma (e.g. Croteau and Kusek, 1992). The present study shows that such speaker panels can also be useful for reducing stigma against transgender individuals. Another important outcome of this study is the relative effectiveness of direct contact in reducing transphobia compared to indirect contact. Direct contact resulted in greater reduction in transphobia both at the post-test and follow-up stages compared to indirect contact.Practical implicationsThe results of this study may benefit HR practitioners and policy makers in designing workplace initiatives and policies in creating an inclusive workplace. This study shows that meaningful interaction with transgenders would be a key step in reducing stigmatisation. Since direct contact is rarely expensive or time consuming, it can be a valuable tool to improve the integration of transgender individuals within society. Therefore, students and employees may be encouraged to interact with transgender individuals through panel discussions and workshops. Indirect contact may be used as a preliminary intervention in certain cases where direct contact may be difficult to organise.Social implicationsThe stigma faced by transgender individuals has a significant negative impact on their quality of life (Grant et al., 2014; Reisner and Juntunen, 2015). It is, therefore, necessary to recognise and reduce prejudice against transgenders at both the college and school levels as well as in work organisations. Educators and managers have a significant role to play in this societal change. This study shows that stigma reduction can be achieved in a fairly simple way through contact theory.Originality/valueThis study is one of the first to investigate Indian students’ perceptions of transgenders. It improves on earlier studies using similar interventions in two main ways. First, this study includes a follow-up assessment, which was not performed in most studies. Second, random assignment of participants to one of two conditions improves the reliability of the findings.