Vanita Gupta, head of the Justice Department's civil rights division, addressed the issue Saturday in remarks at the University of Minnesota Law School commencement.
"Even after the Supreme Court's landmark gay marriage decision last year in Obergefell v. Hodges that guaranteed all people 'equal dignity in the eyes of the law,' we see new efforts to deny LGBTI individuals the respect they deserve and the protection our laws guarantee," she said.
"Efforts like House Bill 2 in North Carolina not only violate the laws that govern our nation, but also the values that define us as a people."
A legal standoff between the administration and North Carolina over the state's controversial House Bill 2
is part of a broader public debate on transgender rights in schools and public life. The statewide policy bans individuals from using public bathrooms that do not correspond to their biological sex and restricts cities from passing nondiscrimination laws.
The Obama administration directive goes beyond the bathroom issue to touch on privacy rights, education records and sex-segregated athletics. And that has unleashed a fierce backlash from ministers, parents and politicians who say the federal government has gone too far.
The joint letter, of course, does not carry the force of law. The threat of a cut in federal funding, however, is abundantly clear.
Politicians lead the charge
Prominent politicians across the nation are defiantly standing up against the guidance from Washington.
Texas Lt. Gov. Dan Patrick accused the Obama administration of "blackmail" and called the directive "social engineering."
"Families in America will not accept it," he told reporters.
Texas Gov. Greg Abbott, on Twitter, promised a fight: "Obama can't rewrite the Civil Rights Act. He's not a king."
Texas Sen. Ted Cruz, who railed against such laws when he was a Republican presidential candidate, did not hold back.
"America has woken up to yet another example of President Barack Obama doing through executive fiat what he cannot get done through our democratic process," Cruz said.
He added, "Having spent many years in law enforcement, I've handled far too many cases of child molesters, of pedophiles, of people who abused little kids. The threats of predators are serious, and we should not facilitate allowing grown men or boys to be in bathrooms with little girls."
North Carolina Gov. Pat McCrory called on Congress to intervene.
"Most Americans, including this governor, believe that government is searching for a solution to a problem that has yet to be defined," he said in a statement. "Now, both the federal courts and the U.S. Congress must intercede to stop this massive executive branch overreach, which clearly oversteps constitutional authority."
'It's up to Congress to write the law'
Lamar Alexander, the chairman of the Senate Health, Education, Labor and Pensions Committee, reiterated that the guidance was not federal.
"This is the kind of issue that parents, schools boards, communities, students and teachers should be allowed to work out in a practical way with a maximum amount of respect for the individual rights of all students," the Tennessee Republican said in a statement.
"Insofar as the federal government goes, it's up to Congress to write the law, not the executive departments."
Justice and Education Department officials have repeatedly made clear that under their interpretation of Title IX, the federal anti-discrimination law in education, schools receiving federal funds may not discriminate based on a student's sex, including a student's transgender status.
"The guidance makes clear that both federal agencies treat a student's gender identity as the student's sex for purposes of enforcing Title IX," the administration said Thursday.
"There is no room in our schools for discrimination of any kind, including discrimination against transgender students on the basis of their sex," Attorney General Loretta Lynch said. "This guidance gives administrators, teachers and parents the tools they need to protect transgender students from peer harassment and to identify and address unjust school policies."
LGBT groups praised the guidelines as a validation of transgender rights and a repudiation of so-called "bathroom bills" that ban people from using public bathrooms that do not correspond with their biological sex.
"This is a truly significant moment not only for transgender young people but for all young people, sending a message that every student deserves to be treated fairly and supported by their teachers and schools," Human Rights Campaign President Chad Griffin said.
But in North Carolina, Republican State Rep. Craig Horn told CNN affiliate WBTV
that he received emails from parents worried about the safety of their children.
"There certainly could be a safety issue," he told the station. "I am not ringing the bell of fear, but I have to be concerned. Kids are kids. We do crazy things."
Horn said topics such as "underserved kids, failing schools, violence in schools, making sure kids get a great education" deserve as much attention from the federal government as the use of bathrooms.
'The conflict has only just begun'
Denny Burk, professor of biblical studies at Boyce College,
the undergraduate school of the Southern Baptist Theological Seminary in Kentucky, wrote in his blog: "This radical directive is a heavy-handed, unconstitutional overreach in order to force Americans to pretend that some boys are girls and some girls are boys. It is absurd and wrong."
Burk predicted that the directive would "cause unrest and conflict all over the country. It is one thing for an individual to embrace a fictional identity. It is another thing for the federal government to coerce everyone else to embrace it too. This is far from over. Indeed the conflict has only just begun."
Rodney Cavness, superintendent of the Port Neches-Groves public school district in Texas, told CNN affiliate KFDM-TV
that he was throwing the Obama administration directive in the trash.
"I don't recognize President Obama," he told the station. "Nothing he does has any shred of leadership ... This is one of those deals where it's total overreach of the federal government."
A member of the Rowan-Salisbury Board of Education in North Carolina this week suggested the use of school bathrooms by transgender students justified allowing high school students to carry pepper spray to class.
"Depending on how the courts rule on the bathroom issues, it may be a pretty valuable tool to have on the female students if they go to the bathroom, not knowing who may come in," board member Chuck Hughes said of the pepper spray, according to the Salisbury Post
The board voted Monday to change a policy prohibiting mace or pepper spray in high school, CNN affiliate WSOC-TV reported
But Hughes told the station and he and other board members -- after weighing the pros and cons -- will vote against the change later this month.
"I was not thinking about the LGBT issue," Hughes said. "Perverts and pedophiles taking advantage of this law in bathrooms was my major concern."
A threat to federal funding
In Fannin County, Georgia, hundreds of parents attended a school board meeting Thursday night to voice concerns about bathroom policy, CNN affiliate WSB-TV reported.
Some threatened to remove their children from school.
"They will never set foot in a Fannin County school again," one mother said, according to the station. "I will stay home every day and homeschool as long as it takes. But that is my belief, and that is my motherly right, and that is where I stand."
Fannin County Schools Superintendent Mark Henson told the station that losing about $3 million in federal funds was not an option.
In a letter to U.S. Education Secretary John King this week, North Carolina's ten Republican members of Congress said they were "deeply troubled by the threat" to withhold federal funds and demanded assurances the state would not be punished.
King said the directive came in response to requests from schools and parents seeking guidance. It's a clarification of the federal government's position that gender identity is protected under Title IX.
"We must ensure that our young people know that whoever they are or wherever they come from, they have the opportunity to get a great education in an environment free from discrimination, harassment and violence," he said.