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Since there isn't one yet.

I haven't read much trans literature at all, it seems to be a lot harder to get hold of than gay or lesbian literature.

Still, here are my recommendations:

Middlesex, by Jeffery Eugenides - the story of Cal, a Greek girl growing up in suburban America, and of her family, and of her realisation that she is in fact intersex.
I love it for the relationship between her/him and her/his best friend, which are incredibly touching, and the amazing quality of the writing.

Stone Butch Blues, by Leslie Feinberg - 'Jess, a working-class woman living as a man, survives a period of homelessness, tries to unionize fellow workers, worries about being found out, and searches for community while undergoing a secret transsexual operation.'
But it's so much more than that, and is pretty traumatic. I love the descriptions of butch/femme life, and the characterisation is brilliant. Be prepared to probably cry while reading this.

Nonfiction:
Queer Theory, Gender Theory, Riki Wilchins - a primer on queer and gender theory, a really good starting place, and it's basically this and instinct that make up a large part of my politics. Really easy to read, and not too long either.

I don't know if you're into YA fiction, but there's always Luna by Julie Anne Peters.
Publisher's Description: Regan's brother, Liam, can't stand the person he is during the day. Like the moon from whom Liam has chosen his female namesake, his true self, Luna reveals herself only at night. For years, Liam has transformed himself into the beautiful girl he longs to be with help from his sister's clothes and makeup in the secrecy of their basement bedrooms. Now, everything is about to change -- Luna is preparing to emerge from her cocoon. But are Liam's family and friends ready to welcome Luna into their lives?

Other than that, I haven't really read much trans lit.
I tried checking by genre on Barnes and Noble's site, but they didn't have a trans category... Weird...

My friend loaned me a book called
'Parot Fish'
or something like that, I haven't begun to read it yet though...but that is a trans novel.

I just finished reading it, and its 'Parrot Fish'...a very good trans novel 3nodding

Stone Butch Blues, though technically not ftm, it's more complicated than that.
That's all I can think of at the moment - though you can get books on women that dressed as men to be in the army etc, though not necessarily transexuals - look at lesbian literature for stuff like that. There's a book that's a visual history of drag kings, which is pretty amazing heart

I really loved Middlesex. 3nodding So many of the characters were eccentric, it definitely made for an interesting read. Some of the secondary characters ended up with...interesting titles, which was a little confusing for me. "Chapter Eleven? Did I miss the guy's real name, or what?"

There's always Breakfast on Pluto - I haven't found the book yet, but the movie was excellent. It's about an Irish transgirl in the 60s/70s trying to find her mother with all the IRA stuff going on around her.

I read that, its more of a butch lesbian novel neutral