Near the end of Hedwig and the Angry Inch, Hedwig removes her wig and hands it to Yitzhak, who eventually realizes that Hedwig wants him to wear (as opposed to wanting Yitzhak to put it back on Hedwig's own head). Yitzhak dons the wig, spins around, and is transformed from a bearded biker dude into a beautiful blonde Hedwig-esque woman. Here is the scene in question:
Hedwig then walks off naked, apparently not herself any more - or at least, not her genderqueer, punk/glam rock star former persona.
I've never been clear on what this meant for Yitzhak and Hedwig: Is the idea that Yitzhak becomes the new Hedwig, and Hedwig becomes Hansel again? Or does Yitzhak just become a famous glam rock Yitzhak, and Hedwig becomes a non-rock-star Hedwig?