Caliente Cab Company, while denying the allegations, agreed to pay Khadijah Farmer $35,000 and train its staff to be sensitive to gender identity issues.
Farmer says she's happy with the outcome, saying it "does send a positive message."
She says she was humiliated last year when she and her party were thrown out of the restaurant after the annual Gay Pride parade.
Farmer, who wears her hair close-cropped and favors khakis and man-tailored shirts, says she has no intention of changing her look.
(Copyright 2008 by The Associated Press. All Rights Reserved.)