A fundamental property of a three-dimensional Bose-Einstein condensate is long-range coherence; however, in systems of lower dimensionality, not only is the long-range coherence destroyed but additional states of matter are predicted to exist. One such state is a "transverse condensate," first predicted by van Druten and Ketterle [Phys. Rev. Lett. 79, 549 (1997)], in which the gas condenses in the transverse dimensions of a highly anisotropic trap while remaining thermal in the longitudinal dimension. Here, we detect the transition from a three-dimensional thermal gas to a gas undergoing transverse condensation by probing Hanbury Brown-Twiss correlations.