This study explored the paradoxical role of the dera (communal household) in shaping the everyday lives of transgender individuals in Pakistan. Drawing on in-depth qualitative interviews with 31 transgender participants selected through purposive sampling, the study explores how the guru–chela system simultaneously provides protection, belonging, and material survival while reproducing dependency, surveillance, and constrained autonomy. Guided by structural injustice theory and Foucauldian governmentality, the study conceptualizes the dera as a form of protective marginalisation. This informal governance structure emerges in response to state absence but reproduces hierarchical control over marginalized bodies. Data were analysed using Braun and Clarke’s reflexive thematic analysis, allowing for a nuanced examination of how power, discipline, and care intersect in everyday life. Findings reveal that family rejection, educational exclusion, and labour market barriers channel transgender individuals into community-based living arrangements that provide safety yet limit long-term mobility and self-determination. While the dera mitigates extreme vulnerability, it also institutionalizes dependence through moral regulation and economic control. The study argues that legal recognition alone is insufficient to address transgender marginalisation and calls for structural interventions that confront the informal systems through which inequality is reproduced. By situating transgender experiences within broader governance and power structures, this study contributes to critical debates on gender, marginality, and social justice in the Global South.