Children should be able to try out "the many cloaks of identity" without being labelled or bullied, the Church of England has said.
In new advice issued to its schools, the Church said youngsters should be free to "explore the possibilities of who they might be".
Nursery and primary school in particular is a time of "creative exploration", it says, and youngsters should be able to pick the tutu, tiara and heels, as well as, or, the helmet, tool belt and superhero cloak "without expectation or comment".
Guidance for Church of England schools on homophobic bullying was first published three years ago, and has now being updated to cover transphobic and biphobic bullying.
No child should be bullied because of their perceived or actual sexual orientation or gender identity, it warns.
Homophobic, biphobic and transphobic bullying causes "profound damage", makes children feel unsafe and put their education at risk, and schools must take action to tackle it, the guidance says.
It says that schools which "promote dignity for all" enable pupils to "accept difference of all varieties and be supported to accept their own gender identity or sexual orientation and that of others."
The advice goes on to say: "In the early years context and throughout primary school, play should be a hallmark of creative exploration.
"Pupils need to be able to play with the many cloaks of identity (sometimes quite literally with the dressing up box). Children should be at liberty to explore the possibilities of who they might be without judgement or derision.
"For example, a child may choose the tutu, princess's tiara and heels and/or the fireman's helmet, tool belt and superhero cloak without expectation or comment."
It adds: "Children should be afforded freedom from the expectation of permanence. They are in a 'trying on' stage of life, and not yet adult and so no labels need to be fixed.
"This should inform the language teachers use when they comment, praise or give instructions.
"It may be best to avoid labels and assumptions which deem children's behaviour irregular, abnormal or problematic just because it does not conform to gender stereotypes or today's play preferences."
The guidance acknowledges that there is a wide range of views among Christians and people of all beliefs about same-sex marriage, sexual orientation and gender identity.
But it also says: "The aim of this guidance is to prevent pupils in Church of England schools and academies from having their self-worth diminished or their ability to achieve impeded by being bullied because of their perceived or actual sexual orientation or gender identity."
In a foreword to the advice, the Archbishop of Canterbury says: "All bullying, including homophobic, biphobic and transphobic bullying causes profound damage, leading to higher levels of mental health disorders,self-harm, depression and suicide.
"Central to Christian theology is the truth that every single one of us is made in the image of God. Every one of us is loved unconditionally by God.
"We must avoid, at all costs, diminishing the dignity of any individual to a stereotype or a problem."
The Most Rev Justin Welby adds: "This guidance helps schools to offer the Christian message of love, joy and the celebration of our humanity without exception or exclusion."
Stonewall said the guidance gives clear advice on recognising and tackling bullying in Church schools.
"All bullying has a profoundly negative impact on children, and it is never acceptable," a spokesperson said.
"Our research shows that nearly half of lesbian, gay, bi and trans pupils are bullied for being LGBT at school: a situation that desperately needs to change.
"We would like to congratulate the Church for sending a clear signal that homophobic, biphobic and transphobic bullying must never be tolerated."
The Church of England has 4,700 schools, collectively teaching a million pupils.