Tennessee is the first state to pass this kind of legislation.
Tennessee has become the first state to restrict drag performances in public.
HB 9, signed by Gov. Bill Lee, makes "a person who engages in an adult cabaret performance on public property" -- or where it can be viewed by minors -- a criminal offense.
NOTE: The video in the media player is from a previous report.
The bill includes "topless dancers, go-go dancers, exotic dancers, strippers, male or female impersonators, or similar entertainers" in the definition of "adult cabaret performance."
A first-time offender will be charged with a misdemeanor. A second or subsequent violation would be a Class E felony, the legislation reads.
Lee also signed a bill banning transgender health care for people under the age of 18.
Right-wing and conservative backlash against drag shows and the transgender community has prompted legislative restrictions on both groups.
Drag performers have told ABC News that family-friendly drag shows are being misconstrued as sexual.
"For a couple of minutes, an hour or two, whatever the case may be - I just want everybody to forget all their troubles," Catrina Lovelace, a drag queen, previously told ABC News. "For me, what a drag show is, is just a celebration of life."
Activists and allies say this is an attempt at banning queer spaces and culture, and a move to push LGBTQ people back into the closet, according to the Human Rights Commission.
"Neither of these laws are about protecting youth - they are about spreading dangerous misinformation against the transgender community," said Human Rights Campaign Legal Director Sarah Warbelow.
She continued, "They are about doubling down on efforts to attack drag artists and transgender youth ... drag is a longstanding, celebratory form of entertainment and a meaningful source of employment for many across the state.
Laws against drag, cross-dressing and gender nonconformity were similarly enforced in the early to mid-1900s, which led to the criminalization of the community.
Sen. Jack Johnson, a sponsor of the bill, celebrated the bill as it headed to Lee's desk.
"This bill gives confidence to parents that they can take their kids to a public or private show and will not be blindsided by a sexualized performance," Lee said in a tweet.
Several similar bills have been recently introduced against drag shows in states like Florida, Arizona, Texas and others.