Trans women face multiple social, economic and health inequalities and the impact of gender oppression and violence is even more profoundly experienced by trans women sex workers, although in culturally specific ways. This paper presents a pilot study conducted to explore and engage with the context of trans women sex workers in Lido Tre Archi, Italy. In line with the community psychology values of social justice, social change and participation, we outline our engagement process and key challenges observed when attempting action research with such a highly marginalised group. Data were collected in the form of ethnographic notes from informal consultations with different stakeholders and participant observations, and of documents (newspaper articles, picture captions) and were analysed using thematic analysis. Findings are organised in three themes relating to the social, policy and physical context in Lido Tre Archi demonstrating evidence of the contextual challenges and how they intertwine to generate a spiral of marginalisation and social exclusion for the participants. We take a collaborative and reflexive stance in our work and conclude with recommended steps and potential limitations to initiate an action research project.