About 100 people protested outside Netflix's headquarters over the airing of a comedy special by Dave Chappelle, which they say was transphobic.
Netflix staff and transgender activists staged the walkout outside the streaming giant's Los Angeles offices.
Demonstrators called on Netflix to fund more trans and non-binary talent, and other measures to avoid "transphobia and hate speech".
Ahead of the rally, Netflix issued a statement in support of the activists.
A video was also released featuring several Netflix stars, including Queer Eye's Jonathan Van Ness and The Good Place actress Jameela Jamil, thanking people for taking part in the demonstration.
Other LGBT celebrities, including Elliot Page and Lilly Wachowski, voiced their support on social media.
Netflix has been mired in controversy over The Closer, in which stand-up comedy star Chappelle says "gender is a fact" and that LGBT people are "too sensitive".
Chappelle has laughed off the backlash, recently saying: "If this is what being cancelled is about, I love it."
Netflix staff called for the rally, though it is unclear how many of those employees were among the protesters outside the offices.
"We are here today not because we don't know how to take a joke. We're here because we're concerned that the jokes are taking lives," said rally organiser Ashlee Marie Preston.
She accused companies like Netflix of "[capitalising] off of tension" and using "algorithmic science to manipulate and distort our perceptions of ourselves and one another".
Forty-four transgender people were killed in the US last year, according to Human Rights Watch, a non-governmental organisation.
Netflix's Chief Content Officer Ted Sarandos previously defended the firm's decision to air the programme.
In a leaked staff memo, he insisted that "content on screen doesn't directly translate to real-world harm", and emphasised the importance of defending "artistic freedom".
The protest comes a day after Netflix reported record subscriber numbers of 213.5 million globally.