Back in 2002, Steven Appleby inadvertently outed himself in a comic strip about a cross-dressing superhero saving fashion victims from pinstripes and overalls. The strip, published in the Guardian, brought “Dragman” swooping down to earth in a mauve ballgown and yellow wig. Although Appleby had been out for several years to his close friends and family, he realises now that the new character embodied an urge to go further. “I’d had enough of leading a double life. Cross-dressing in secret once or twice a week felt dishonest and stifling,” recalls the 64-year-old artist. “I’d learned to be comfortable with being a transvestite and now I was desperate to live as one.”

Eighteen years later, Dragman is back as the star of his own book. His adventures take him from the tip of the Shard to a fetish club deep beneath London’s railway arches, on the trail of a serial killer who specialises in murdering transvestites. But before he can solve the crimes he has first to overcome the enmity of a superhero community that is not only transphobic but has banned any rescue that is not strictly covered by insurance. By instinctively saving a young girl as she plummets off a rooftop, Dragman has outlawed himself.

Appleby created the book at his studio on a busy south London street, where he opens the door to a colourful gathering. His wife, Nicola Sherring – to whom he remains married though they separated many years ago “as a biblical couple” – is sharing a sandwich with Charlie, a scarlet cockatoo, who sits on her shoulder, watched jealously by Una, an accident-prone one-eyed pug (named from Edward Gorey’s The Gashlycrumb Tinies – “U is for Una who slipped down a drain”). Sherring is responsible for colouring the book while Charlie plays a bit part in it, swooping around a conservatory. “He wasn’t meant to be in it at all, but Nicola sneaked him in, says Appleby, “so I had to redraw a whole spread.”

The relationship between fiction and autobiography is seldom as delicately nuanced as it is in Appleby’s protagonists. Like Dragman’s alter ego August, he discovered his transvestism after trying on a woman’s stocking that he found down the back of a sofa at the age of 19. Like August’s long-suffering wife Mary, Sherring was a carpenter when the couple met. “She came to make bookshelves for my flat and we just got on so well that I kept finding more jobs for her to do, and then we fell in love.”

Dragman to the rescue …

While August keeps his secret locked up in boxes in the attic, Appleby was honest with Sherring from the start – even though he admits that their marriage involved a certain amount of denial. “I assumed my other issues would fade into the background or even go away, because I certainly hadn’t fallen in love ever before. And so I thought, wow this is amazing, maybe it’s the antidote.”

Sherring already had two sons and they had two more together. When their younger boys were nearring the end of primary school, Appleby felt he had to tell them. “I was feeling increasingly itchy about it – not depressed, but just kind of incomplete,” he says. “I wanted to be a joined-up person and I also didn’t want to have this secret from the family and particularly from my boys.” With a couple of friends, he and Sherring went off to a wig shop. “I wanted something short, so people wouldn’t notice a change, but then I put on this style (he pats his trademark black bob), and all of them said, ‘that’s the one’.”

Back home, his sons “didn’t bat an eyelid. They were probably watching TV or playing computer games.” On a car journey to their Northumberland holiday cottage a while later, a school friend started moaning about how embarrassing her parents were. “I said to them ‘What must I be like?’ And they replied ‘Oh no, Dad, you’re not embarrassing at all. You don’t wear lace dresses to school like you do at night.’”

The cottage, which used to belong to Appleby’s mother, provides a link to his childhood, which was spent in a leaky old vicarage near the Scottish border. He was born in Newcastle upon Tyne, the oldest of four children. His mother was Canadian and his father worked for his family’s quarrying firm, which was slowly going bust. After a local Church of England primary school, where he won prizes for plasticine modelling, he boarded at a Quaker school from the age of 11. “I loathed it to begin with, but in the end I wouldn’t wish it away,” he says. “It’s that mixed thing, because I have huge respect for the Quakers and I still have friends from school.”

Appleby was tutored by Quentin Blake: ‘He taught me that you didn’t have to be a brilliant drawer if your drawings have personality’

He hung out in the art room and got involved in a band, going on to do art and design at Manchester Polytechnic, “mainly because I found art fun, and because my academic subjects weren’t brilliant”. The experience delivered an existential shock. “Suddenly I found lots of people could draw much better than me.” He dropped out for a while to join a band, before returning to do graphic design at Newcastle Polytechnic, followed by illustration at the Royal College of Art, where he was tutored by Quentin Blake. “He taught me that you didn’t have to be a brilliant drawer if your drawings have personality. You can draw a car really badly, as long as it has the spirit of a car.” He flips the book open on a sweetly wonky green Mini, in which Dragman tootles around when he is being August.

This revelation didn’t entirely cure his sense of inadequacy, and he took a job at a design firm, Assorted iMaGes, founded by a college friend, Malcolm Garrett. Together they ran high-profile campaigns for bands such as Buzzcocks and Duran Duran. “Malcolm would design the album covers and I’d do the other things like playing cards or bubblegum cards. It was fun, but after a few years I got frustrated, because you’re doing it for other people.”

One of the first characters he created was Captain Star, an obsolete astronaut stranded on a distant planet with an outsized ego, who was invented for a strip in New Musical Express and went on to become the star of a TV animation series voiced by Richard E Grant and Adrian Edmondson. Commissions from Punch, the Guardian and the Times followed. He collected his work into a series of books that make him appear to be a self-help guru: Normal Sex was followed by Men: The Truth and The Truth About Love. His Loomus cartoons about a small boy and his dysfunctional parents, which ran for 11 years in the Guardian Family section, were published as Steven Appleby’s Guide to Life.

It’s all a question of curation, he says. “So for Normal Sex, I collected everything I’d ever done about sex and divided it into sections.” Published in black and white in 1993, its opening pages are a characteristic mix of awkward truths and absurdist humour: “Some individuals are attracted only to themselves. Other confused people believe they may belong to a hitherto undiscovered sex. Of course creepie-crawlies have sexual worries too. Worms have trouble deciding which end is which …”

Dragman is his first venture into sustained narrative, and it has already been optioned for a live action TV adaptation. In some ways, he says, it’s a strange choice of subject because “I’m not crazy about superheroes at all, but I loved the Batman series that I watched in the 1960s and, looking back, I probably wanted to be Catwoman.” He read the Dandy and the Beano alongside his sister’s comics, Bunty and Diana. “I did move on to superhero comics a bit, but not all that much. Then I got into science fiction. I loved Philip K Dick, particularly, because nothing in his books was ever quite what it appeared to be, and that seemed to be reality to me. Maybe it reflected the secret life that I had.”

The relationship between fiction and autobiography is seldom as delicately nuanced as it is in Appleby’s protagonists

Which brings us back to the question of gender. Unlike Dragman, Appleby doesn’t have a transvestite alias, though he lives full-time in woman’s clothes. He briefly investigated gender reassignment but decided against it, citing his encounter with “Colin the mouse man” – a pest-controller – as an example of both the challenges and rewards. “Colin arrived at the door and I opened it and said, ‘Hi. I’m Stephen. I changed my image a few years ago,’ and he laughed, and we had this whole conversation. On his second visit he brought me a couple of leopard print screwdrivers, with little fluffy bits, and said ‘I was given these for Christmas. I thought you might like them.’”

He now lives partly in his studio and partly back at the family home with Sherring and her partner, a son and his girlfriend, a nephew, and, of course, Charlie and Una. Friendship is important to him, cropping up time and again in his professional life. When he wanted to try out the ideas in Dragman, it was to a member of his old school band that he turned.

The book is full of Appleby’s unique brand of punning fun. If it has a message, it’s that it pays to be honest, and capitalism isn’t honest: it steals souls. Its warning is knitted into a plot that is indebted to hard-boiled detective fiction and soap opera, as well as to his own experience of the cross-dressing scene.

“I would know people as Deirdre or Susan and have no idea what their male name is, or whether they’re a plumber or a lawyer,” he says. “I just feel so lucky that the world allows me to be myself. ”

• Dragman is published by Vintage (RRP £18.99). To order a copy go to guardianbookshop.com. Free UK p&p over £15.