A sex worker accused of knowingly transmitting HIV is being held in a male prison, despite identifying as female.

Clayton James Palmer, 38, who goes by the name Sienna Fox, was extradited from New South Wales to Western Australia last week.

It is alleged she had unprotected sex with a male client over several months in 2015 after being diagnosed with HIV in 2014.

Palmer is charged with causing grievous bodily harm.

Palmer's lawyer Martin Muk told the Perth Magistrates Court his client denied she knew about the diagnosis.

She is yet to formally plead to the charge.

Mr Muk also said the sex worker denied the alleged victim was a client, and instead claimed the pair were in a consensual relationship.

The court heard Palmer was being supported by the Sex Workers Association which offered to provide a surety and accommodation should she be granted bail.

However Magistrate Paul Heaney refused bail saying the case was "unusual but very serious" and bail would be inappropriate.

Palmer was remanded in custody and is due to appear in court again next month.

Situation stressful, frightening for Palmer: advocate

People For Sex Worker Rights in Western Australia spokeswoman Rebecca Davies said the organisation was disappointed by the decision.

"She's distressed as I think anyone would be," she said.

"It's a really stressful, frightening situation to be put into the wrong prison on top of what is going on.

"Someone who identifies as a woman has been put in a male prison where they're probably going to be subject to discrimination and possibly abuse from other prisoners.

"It's just not a good scenario any way you look at it."

She said the WA Government needed to act to ensure the situation did not happen to another transgender woman.

WA Corrective Services Minister Joe Francis issued a statement saying the department would not comment on individual cases.

"The Department of Corrective Service treats all prisoners in accordance with the WA Prisons Act," the statement said.

"Assessment of prisoners is based on risk factors including vulnerability and self-harm.

"The Department is bound by the WA Gender Reassignment Act 2000 when required."