The movie is a docudrama about transvestism and transsexuality, and is semi-autobiographical in nature. Wood himself was a transvestite, and the movie is a plea for tolerance. However, it has become a cult film due to its low-budget production values and idiosyncratic style.
The sex reassignment surgery of Christine Jorgensen, born George William Jorgensen, Jr., made the headlines in the US in 1952, and prompted George Weiss, producer of low-budget films, to commission a movie to exploit it. Wood took the job, but instead made a movie about transvestism. The movie was deemed too short and too divergent from what was requested, so Wood tacked on a few extra scenes about sexual reassignment and Weiss spliced in two unrelated soft-core sequences, cutting in reaction shots of Wood and Lugosi.
Also: Trailer of the film.