James Franco is set to stun fans when new transgender magazine Candy goes on sale - he poses in drag on the cover.

The Milk star strutted his stuff for celebrity photographer Terry Richardson for the magazine's Fall-Winter 2010-2011 issue - and he's barely recognisable with his hair slicked back, and his face covered in blue eyeshadow and red lipstick.

According to The Huffington Post, Candy's editors describe the publication as "the first fashion magazine ever completely dedicated to celebrating transvestism, transexuality, cross dressing and androgyny, in all its manifestations".

The actor recently graced the cover of gay magazine The Advocate, in which he denied being homosexual despite constant speculation surrounding his sexuality.

He said: "Sure, I'd tell you if I was (gay). I guess the reason I wouldn't is because I'd be worried that it would hurt my career. I suppose that's the reason one wouldn't do that, right? But no, that wouldn't be something that would deter me. I'm going to do projects that I want to do."