The term two-spirit is a relatively new English term to describe very old traditions of understanding and experience of gender and sexuality among some Aboriginal, First Nations, and Native people. A simplified explanation of two-spirit is to say that two-spirit is an umbrella term for Native, Aboriginal, and First Nations people who identify as gay, lesbian, bisexual as well as transgender and transsexual or otherwise experience their sexual and gender identities as being outside of the heteronormative binary of man/woman, gay/straight, etc...
There is no one definition of two-spirit, and as an educator I would say the best place to start is to hear from many two-spirited people how they understand the term and its connection to their communities and traditions. Here are some definitions along with links to the organizations they came from:
From the Bay Area American Indian Two-Spirits:
"Two-Spirit people are defined as LGBT and gender-variant members of the Native American community. The term 'Two-Spirit' was coined in 1990 by queer Native Americans gathering in Winnipeg. Many contemporary LGBT Native Americans use the term “Two-Spirit” to maintain cultural continuity with their traditions. In many of our cultures, some individuals possessed and manifested a balance of both feminine and masculine energies, making them inherently sacred people."
From the Northeast Two-Spirit Society:
"What is a two-spirit? In crude terms, it is a LGBT Indian. For a more refined definition, here’s an historical perspective:
In many American Indian traditions, there were individuals, who entered into same-sex relationships, who were considered holy and treated with the highest respect and acceptance. They were the historians, the healers, and people of empowerment. They possessed a delicate balance of male and female "spirits", were often honored for being unique and having a different spiritual calling. One of the important functions they provided was as mediators between the spirit world and physical world."
From Richard Jenkins and the Two Spirit Circle of Edmonton Society:
"Two Spirit peoples are those Aboriginal peoples who self-identify as lesbian, gay, bisexual, transgendered, intersex, queer or questioning. Many, and I'm one of them, believe that total integration of our sacred feminine and masculine spiritual energies can be achieved in a lifetime through our physical, emotional and mental bodies here on the planet."
More organizations and links:
You may notice that some organizations that serve LGBT and queer people include reference to two-spirit peoples by adding a "2S" to the end of the acronym GLBT. It's worth knowing that this isn't always welcome as many agencies simply add the letters without addressing in a meaningful way how their work excludes Aboriginal, First Nations people in general and two-spirited people in particular. This is a similar criticism that trans people make, as it has become standard to add a "T" to GLB even though many organizations don't make an effort to be inclusive of trans people, or understand that gender identity and sexual orientation are two very different kinds of experience.