Aidan, 16, who was born female, claims he was effectively excluded because Hereford Cathedral School refused to let him wear a boy's uniform.
This was despite the support of his mother and the family's GP as he began his transition.
The action is being taken under the 2010 Equality Act. The school said it would defend its position.
Aidan said that when he came out as a boy his mother was "definitely heartbroken".
"I feel like she had dreams of seeing her daughter getting married and having children," he said. "She definitely needed time to mourn and I needed to let her have that time."
Source: Department for Education, The Equality Act 2010 and schools
When he told the school he did not want to be addressed as a girl or wear girl's clothes, he claims staff said it was a "phase" that he would grow out of.
He said he was told he was "attention seeking". "They didn't really take it seriously," he added.
Mother Jackie described the school's treatment as "appalling".
"They made my child out to be a freak and someone who would contaminate other students," she claimed.
A letter from Aidan's mother to the school's chair of governors says she had no choice but to remove her son from the school after being told the school was "inadequately prepared to accommodate Aidan's needs and give him the high level of support and pastoral care that he deserves".
The legal action is currently ongoing through the courts.
It is understood part of the school's defence claims Aidan was withdrawn from the school by his family, prior to a final decision being made by them about whether his needs could be met.
In a statement Hereford Cathedral School said: "The continued happiness, wellbeing and safety of our pupils is the top priority.
"The family's grievances against the school are the subject of current legal proceedings. For that reason the school is unable to discuss any details relating to this matter at the present time, other than to state that it will defend its position in the proceedings."
Note: The family wished to remain anonymous so names have been changed.
A transgender teenager is taking legal action against his former school for discrimination.