RESIDENTS OF SILVERTON, OREGON, like to say their town is "40 miles and 40 years from Portland." If you visit in early January, the sign on the Assembly of God church may still read HAPPY BIRTHDAY JESUS. If you're friendly when you check into the lone hotel, the clerk will likely thank you "for the smile." And if you stop by the Rolling Hills Bakery, which has the best muffins around, you'll probably learn that it was recently saved from bankruptcy by a handful of locals who stepped up to cook, clean, and work behind the counter—without pay.

On the first Monday night of the year, the parking lots at the community center on Water Street are full. Most of the cars belong to the women who've mobbed the Jazzercise class. The rest belong to the 30 or so people on hand to watch the newly elected mayor take the oath of office. Though the gathering is small—a good 2 million heads fewer than the crowd that will greet President Barack Obama at his inauguration—the occasion is momentous, at least for the 9,500 citizens of Silverton. Stu Rasmussen is about to become the nation's first openly transgender mayor.

"Normally, I dress to thrill," he says. But on this evening, instead of the custom-made corsets and leopard-print bathing suit he favors as tops, the 60-year-old Rasmussen—who prefers to be called not Your Honor or Mr. Mayor but rather Stu—has donned a demure red sweater that clashes with his dyed auburn hair. It does, however, match his acrylic nails—which he wears at a length Dolly Parton would admire—as well as the tights he reveals whenever he crosses his legs, opening the Beyoncé-length slit in his black silk skirt. Try as he might to tone down his look, he cannot keep the sweater from clinging to his chest. To all who rubberneck at the sight of the breast implants he got in 2000, Rasmussen says, "Yeah, they're real—real big!"

Longtime mayor Ken Hector, who lost his bid for re-election by 519 votes, stands quietly next to the man who beat him. He's dressed in a red sweater vest. To honor Hector's 16 years of service, Rasmussen presents him with a crystal clock. "Now you'll have plenty of time on your hands," he says. Rasmussen then places his left hand on a Bible, raises his right hand in the air, and pledges "to uphold the Constitution of the United States, the Constitution of Oregon, and faithfully perform my duties as mayor." After some handshakes, he takes a seat on the dais, puts on a pair of reading glasses, and props his chin atop the crimson-tipped fingers he once used to rebuild a Chevy Suburban engine. He leans forward and, in the voice of a man introducing a burlesque act, says, "You're probably wondering why I've asked you here."