Before the changes, only male and female options were available on the gender tab in profiles.
Facebook has also updated its settings so users can choose a neutral pronoun, meaning they are referred to as 'they, their or them'.
This screen shot released by Facebook shows the new gender option screen. Facebook came up with its range of terms after consulting with leading gay and transgender activists, and the company plans to continue working with them
This screen shot released by Facebook shows the new gender option screen. Facebook came up with its range of terms after consulting with leading gay and transgender activists, and the company plans to continue working with them
Facebook rolled out the changes to its more than 159 million monthly users in the U.S. in February.
The changes are aimed at giving people more choices in how they describe themselves, such as androgynous, bi-gender, intersex, gender fluid or transsexual.
'There's going to be a lot of people for whom this is going to mean nothing, but for the few it does impact, it means the world,' said Facebook software engineer Brielle Harrison.
Harrison worked on the project and is herself undergoing gender transformation, from male to female.
'All too often transgender people like myself and other gender nonconforming people are given this binary option, do you want to be male or female? What is your gender?,' said Harrison.
'And it's kind of disheartening because none of those let us tell others who we really are,' she said.
'This really changes that and for the first time I get to go to the site and specify to all the people I know what my gender is.'
Simon Milner, Policy Director, UK Middle East and Africa at Facebook, added: 'When you come to Facebook to connect with the people, causes, and organisations you care about, we want you to feel comfortable being your true self.
'An important part of this is the expression of gender especially when it extends beyond the definitions of just "male" or "female". Today’s announcement provides significantly more options for people in the UK.'
Facebook, which has 1.23 billion active monthly users around the world, also allows them to keep their gender identity private, and will continue to do so.
The Human Rights Campaign last year found that 10 percent of the 10,000 lesbian, gay, bisexual transgender youths it surveyed used 'other' or wrote in their own gender terms.
When a Facebook user customises their gender, they can also choose a preferred pronoun so that third party apps and messages from Facebook will be addressed in the right way.
There is currently no way for advertisers to target specific groups based on the 'custom' settings on Facebook.
The change to the gender selection option is seen as a major step toward acceptance for people who don't self-identify as male or female, but the high-profile development seemed senseless to those who believe in two genders, no more.
'Of course Facebook is entitled to manage its wildly popular site as it sees fit, but here is the bottom line: It's impossible to deny the biological reality that humanity is divided into two halves - male and female,' said Jeff Johnston, an issues analyst for Focus on the Family, an influential national religious organisation based in Denver.
'Those petitioning for the change insist that there are an infinite number of genders, but just saying it doesn't make it so.
'That said, we have a great deal of compassion for those who reject their biological sex and believe they are the opposite sex.
Masen Davis, executive director of the San Francisco-based Transgender Law Center, said it may be hard for some people to understand the importance of having the ability to select from multiple genders online. But he said many transgender people will be thrilled with the change.
'We applaud Facebook for making it possible for people to be their authentic selves online,' he said.
In the past decade, the transgender movement has become much more organised and outspoken, demanding the kind of civil rights and respect already sought by gay activists.
'During this time, the transgender umbrella has been growing well beyond transsexuals to encompass a wide variety of gender identities.
The move by Facebook came after years of lobbying from users, some who started Facebook pages to petition for the change.
Google+ offers male, female and 'other' as choices, but transgender advocates said Facebook's many specific options puts the platform well ahead of any other online community. About 1 per cent of Google+ users identify as 'other'. The idea of expanding gender choices percolated at Facebook for about a year and started to come to fruition during an in-house brainstorming four months ago, project manager Lexi Ross said.
Unlike getting engaged or married, changing gender is not registered as a 'life event' on the site and won't post on timelines.
Therefore, Facebook said advertisers cannot target ads to those who declare themselves transgender or recently changed their gender.
Users also can select 'neither' or 'other' and separately indicate whether they want to be referred to as he, she or they.
Facebook came up with its range of terms after consulting with leading gay and transgender activists, and the company plans to continue working with them.
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