The incident happened after police yesterday raided several beauty salons in conservative Aceh province and rounded up a dozen transgender employees over claims they had teased a group of boys.
Police accused the employees of violating the province's religious laws.
Dozens of locals tried to attack the group of beauticians as they were hauled off to the police station, but they were pushed back by authorities, they said.
"We have reports from mothers that their sons were teased by the transgender women," local police chief Ahmad Untung Surianata told AFP Monday.
"Their numbers are growing here -- I don't want that," he added.
Aceh on Sumatra island has been ruled by Islamic law since it was granted special autonomy in 2001 -- an attempt by the central government to quell a long-running separatist insurgency.
This month a Christian was publicly flogged for selling alcohol in the conservative region, making him only the third non-Muslim in Indonesia to suffer a public whipping.
The transgender women would be detained for several days followed by a five-day "training" regimen including efforts to make them walk and speak in a more "manly" way, as well as "morals teaching" by local clerics, police said.
"We want to change their mentality so they can be better people," Surianata said.
Homosexuality and gay sex are legal everywhere in Indonesia except in Aceh.
But police have often used the country's tough anti- pornography legislation to criminalise members of the LGBT community, and there have been a recent string of arrests.
"It's very strange that officers (in Sunday's incident) would arrest innocent people and cut off their hair," said gay rights activist Hartoyo, who like many Indonesians goes by one name.
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