Where It All Goes Down
The O'Neill House
The O'Neill house is pretty bland, but it's where most of the action takes place—it's inside the walls of this house that Regan and Liam interact the most as siblings. And it's within these walls that Luna has to dress up as a boy during the day and where she lets loose and dresses as Luna during the night.
The house acts as a kind of containment—Regan and Luna have to conform to the family's rules when they're in the house. When they try to leave to go to the mall, they're almost foiled by their dad:
Dad whirled on us. "You kids are staying home." (10.27)
For the O'Neill kids, staying at home isn't just a boring sentence—it means that Luna can't be her real self. Only when she leaves the confine of their home is she able to really present as the person she knows herself to be. For the rest of the time, she's resigned to stay in the closet—or rather, the basement.
In the Basement
The family basement is the one place that the O'Neill kids and Aly get a respite from their parents and their expectations. Aly's parents are super strict, so she prefers to spend most of her time playing video games in the basement with Luna (whom she knows as Liam for a good chunk of the book). And Luna uses the basement as a place to escape—it's where she can keep her real self, where she's created a space of her own—a space that her dad doesn't understand:
Dad charged out the door, forcing me to jump aside or get trampled. "What is all this crap?" He waved an arm over the computer parts stacked along the wall, some still in shrink warp. "Is he stealing this stuff? Selling it?" (14.44)
Ultimately Regan and Luna's dad doesn't understand what Luna does in the basement all day. It's a place where Luna retreats to make her own world—she keeps her girly things down there, and runs a business. In the basement, Luna can be herself. It's not the ideal place to be because she still has to hide away from everyone, but it's a very important refuge.
Just Your Average All-American High School
Regan and Liam attend school at your average all-American high school in your average all-American town. This presents a microcosm of the world at large because it shows how people will react to Luna in society in general. In other words, at their high school, Regan and Luna get a taste of how prejudiced everyone else can be toward trans people:
"Don't? Don't what? Do this?" Hoyt raised his arm and ripped off Luna's wig. Clumps of Liam's hair tore out with the bobby pins.
The girls above them eyed each other and giggled. They skittered down the stairs and scurried off, their laughter ringing in my ears. (22.117-118)
Through the school environment, Regan and Luna see how cruel and uncompassionate people can be—they see how everything is a popularity game, and everyone wants to fit in with the homogenous crowd. When Luna stands out and presents herself as Luna at school (instead of as Liam), people react as though she's a freak and something to be ridiculed.