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The challenge presented by Butlers theory depicted in Gender Trouble is derived from her revision of the generally established orthodox assumptions in our western society regarding gender and sexual identity. She attacks the accepted 'naturalness' of gender and reveals it as the fiction that it essentially is. According to Butler, the actions that are associated with a person's sexual identity are not a reflection of someone's innermost self but rather culturally coded acts. Butler's theory is primarily based upon the philosophical views of the French theorist René Descartes that a person's conception of his own identity is essentially dualistic. Descartes claimed that a person's process of self-identification transpires by making a clear distinction between the body and the mind. The essence of this opposition is that the body is in fact perceived as inferior to the mind. The basis of this claim is exactly what Butler intends to reverse, namely that a person's everyday behaviour reflects his or her gender and sexual identity and is essentially a reflection of that person's individual psyche. Her provocative argument that gender is merely a "stylized repetition of acts" essentially implies a form of materialism that negates any possibility of a spiritual explanation of self-identity.
Unlike Luce Irigaray, Butler refutes the notion of sex as a naturally established category. Butler argues that alongside gender, sex is also an acquired socio-cultural category. Butler argues that the construction of gender and sexual identity emerges out of culturally and socially established practices. These practices, including their discourse, have their own recorded history as well as their own social and political dynamics. Furthermore, Butler's criticism of Irigaray is essentially that Irigaray's Woman's natural state is outside of the phallocentric economy. In her influential book Gender Trouble (1990), Butler does not offer an ontological or essentialist description of what it is to be a woman (Butler, 32). Instead she presents the argument that the traditional power structures of our society in fact create the very identities that it regulates. These power structures are essential to the notion of sexuality. Butler claims that sexuality does not have a natural state where power later comes in to disrupt that state. According to Butler, sexuality does not exist outside of power. It is for this reason that Butler does not present any ontological arguments. For Butler, the concern with the ontology of a woman is simply a misrecognition of some ontological core for what is merely a series of repetitions. The essence of gender is a matter of repetitions. Butler ascripes power to "regimes" as in "the power regimes of heterosexism and phallogocentrism seek to augment themselves through a repetition of their logic . . ." (Butler, p.32). Consequently, "if repetition is bound to persist as the mechanism of the cultural reproduction of identities, then the crucial question emerges: what kind of subversive repetition might call into question the regulatory practice of identity itself?" (Butler, p. 32). This question is directly relation to the core argument that Butler presents in Gender Trouble.
In other words, Butler's understanding of gender as performative is grounded in her belief that the very core of gender identity is produced through the repetition of behaviour. She talks of repetitions in which the subject is neither outside of those repetitions nor that the subject is something internal which is expressed through those repetitions. So much as the repetitions themselves are the very mechanisms by which those identities are reproduced and the very positive concepts of identities are brought forward. In addition to this ground-breaking claim, Butler introduces the concept of gender as a performance or 'gender performativity'.
In discussing this notion of 'gender performativity', Butler stresses the importance of the distinction between performing a gender and gender as a performance. When she talks about gender as performative, Butler argues that this is not similar as saying that gender is performed. When we say that we perform a gender we've taken on a role, we're acting or role-playing in some way. This performance of a rule is definitely crucial to the gender that we are and the gender that we present to the world. Nevertheless, it is very different from what she means by gender performativity.
For something to be performative means that it produces a series of effects. We act and walk, speak and talk in ways that consolidate the impression with 'being a man' or 'being a woman'. Butler explains that in our modern-day society people act as if 'being of a man' or 'being of woman' is actually an internal reality or in fact something that is simply true about us. Instead it is a phenomenon that is produced and reproduced all the time. Butler claims that no person is born with a fixed gender. Gender is not to be perceived as a manifestation of a subject's internal essence. Alternately, one should view gender identity as a produced product of our actions and discourse. That is to say, Butler argues that "everyday actions, speech, utterances, gestures and representations, dress codes and behaviours as well as certain prohibitions and taboos all work to produce what is perceived as an essential masculine or feminine identity." 
By introducing the notion of 'gender performativity', Butler criticizes the traditional power structures whose agenda is to keep people in their socially accepted gendered place. Institutional powers like psychiatrical normalization intend to prevent the disruption of the established gender norms. Butler questions how these institutions are established or whether they ought to be policed. She insists on the historical and cultural foundation of these institutional powers and emphasizes the importance of overcoming this silent gender police function that the institutional powers project. Furthermore, Butler expresses her desire to resist the violence that is opposed by ideal gendered norms against those who are non-conforming in their gender presentation.
In the final chapter of Gender Trouble "Bodily inscription, Performative subversions", Butler gives the important inner-outer distinction regarding our notions of gender the attention which it merits. Butler argues that in the orthodox view of gender the figure of our inner soul is inscribed on the outer body. However, these inscriptions on the body or the outside create the illusion of a concrete and organized gender core. Thus, what makes this problematic is that so far we have gained our understanding of our own inner essence through the inscription on the body.
To support her own theory, Judith Butler adopts the argument made by Foucault in his influential work Discipline and Punish that the suffering imposed on prisoners is, contrary to western belief, externalized. The oppression of the prisoners is not manifested in the inner soul but rather on the external body. Foucault argues that since the methods of punishment used by the agents of the institutional power are inflicted on the body, these actions similarly justify the institute's control over the prisoner's body. Butler engenders Foucault's argument and claims that gender is fundamentally the principal representative of western cultural society which operates on the external body, and in this process formulates the definition of masculine or feminine, in addition to standardizing the image of heterosexuality.