If you want to apply for a new passport (rather than renew an existing passport and change the name and sex on it), then you'll need a birth certificate. If you want to keep the original BC, you might still be able to get the right name and sex marker on a first-time passport if you have the correct supporting documents for name change and "sex change." You would have to find that out when you apply. There's always the possibility that the State Dept. screws it up, but they are pretty diligent about that sort of thing, and their new guidelines for changing sex markers are pretty fair.
When you change your BC in California, you get a brand new document. So if you have any changes that require proof of "female" birth, you would probably want to take care them before you change the BC. The Selective Service exemption, for example, requires proof that you were designated female at birth.
Some trans men don't like the idea of "erasing their past" by getting a new BC.
If you were born in CA, you can get a few copies of the original birth cert and keep them in a couple of safe places, just in case. Then you'll always have them if you need them for some purpose that arises unexpectedly. Once you have them in your possession, you can change the BC and use it to get a passport.
I think there are more advantages than disadvantages to changing the BC, as long as you have copies of the old one and as long as you take care of SSS right away. But I don't have any qualms about getting a brand new BC. I wish my birth state allowed that.
Do bear in mind that for identification and citizenship purposes, a passport is usually accepted in lieu of a birth certificate.
