How to transfer custom token by '@solana/web3.js'

The problem with the existing answers is they only show you how to first create a new custom token then perform a transfer from one wallet to another. Here I will show how to do this with an existing custom token.

import { Token, TOKEN_PROGRAM_ID } from "@solana/spl-token";
import { web3, Wallet } from "@project-serum/anchor";

async function transfer(tokenMintAddress: string, wallet: Wallet, to: string, connection: web3.Connection, amount: number) {
  const mintPublicKey = new web3.PublicKey(tokenMintAddress);    
  const mintToken = new Token(
    connection,
    mintPublicKey,
    TOKEN_PROGRAM_ID,
    wallet.payer // the wallet owner will pay to transfer and to create recipients associated token account if it does not yet exist.
  );
        
  const fromTokenAccount = await mintToken.getOrCreateAssociatedAccountInfo(
    wallet.publicKey
  );

  const destPublicKey = new web3.PublicKey(to);

  // Get the derived address of the destination wallet which will hold the custom token
  const associatedDestinationTokenAddr = await Token.getAssociatedTokenAddress(
    mintToken.associatedProgramId,
    mintToken.programId,
    mintPublicKey,
    destPublicKey
  );

  const receiverAccount = await connection.getAccountInfo(associatedDestinationTokenAddr);
        
  const instructions: web3.TransactionInstruction[] = [];  

  if (receiverAccount === null) {

    instructions.push(
      Token.createAssociatedTokenAccountInstruction(
        mintToken.associatedProgramId,
        mintToken.programId,
        mintPublicKey,
        associatedDestinationTokenAddr,
        destPublicKey,
        wallet.publicKey
      )
    )

  }
  
  instructions.push(
    Token.createTransferInstruction(
      TOKEN_PROGRAM_ID,
      fromTokenAccount.address,
      associatedDestinationTokenAddr,
      wallet.publicKey,
      [],
      amount
    )
  );

  const transaction = new web3.Transaction().add(...instructions);
  transaction.feePayer = wallet.publicKey;
  transaction.recentBlockhash = (await connection.getRecentBlockhash()).blockhash;
  
  const transactionSignature = await connection.sendRawTransaction(
    transaction.serialize(),
    { skipPreflight: true }
  );

  await connection.confirmTransaction(transactionSignature);
}

notice how we add an instruction for creating the recipient's custom token account if they don't have one.

You need to make sure to install the npm bindings for the token program as you can see from imports below

import * as web3 from "@solana/web3.js";
import * as splToken from "@solana/spl-token";

// Address: 9vpsmXhZYMpvhCKiVoX5U8b1iKpfwJaFpPEEXF7hRm9N
const DEMO_WALLET_SECRET_KEY = new Uint8Array([
  37, 21, 197, 185, 105, 201, 212, 148, 164, 108, 251, 159, 174, 252, 43, 246,
  225, 156, 38, 203, 99, 42, 244, 73, 252, 143, 34, 239, 15, 222, 217, 91, 132,
  167, 105, 60, 17, 211, 120, 243, 197, 99, 113, 34, 76, 127, 190, 18, 91, 246,
  121, 93, 189, 55, 165, 129, 196, 104, 25, 157, 209, 168, 165, 149,
]);
(async () => {
  // Connect to cluster
  var connection = new web3.Connection(web3.clusterApiUrl("devnet"));
  // Construct wallet keypairs
  var fromWallet = web3.Keypair.fromSecretKey(DEMO_WALLET_SECRET_KEY);
  var toWallet = web3.Keypair.generate();
  // Construct my token class
  var myMint = new web3.PublicKey("My Mint Public Address");
  var myToken = new splToken.Token(
    connection,
    myMint,
    splToken.TOKEN_PROGRAM_ID,
    fromWallet
  );
  // Create associated token accounts for my token if they don't exist yet
  var fromTokenAccount = await myToken.getOrCreateAssociatedAccountInfo(
    fromWallet.publicKey
  )
  var toTokenAccount = await myToken.getOrCreateAssociatedAccountInfo(
    toWallet.publicKey
  )
  // Add token transfer instructions to transaction
  var transaction = new web3.Transaction()
    .add(
      splToken.Token.createTransferInstruction(
        splToken.TOKEN_PROGRAM_ID,
        fromTokenAccount.address,
        toTokenAccount.address,
        fromWallet.publicKey,
        [],
        0
      )
    );
  // Sign transaction, broadcast, and confirm
  var signature = await web3.sendAndConfirmTransaction(
    connection,
    transaction,
    [fromWallet]
  );
  console.log("SIGNATURE", signature);
  console.log("SUCCESS");
})();

Small update on @Ozymandias answer, there seems to be few changes in the spl-token library. Firstly Token dosen't exist anymore. And few functions such as Token.getAssociatedTokenAddress also seem to be removed. Here is the updated code:

import * as splToken from "@solana/spl-token";
import { web3, Wallet } from "@project-serum/anchor";

async function transfer(tokenMintAddress: string, wallet: Wallet, to: string, connection: web3.Connection, amount: number) {

  const mintPublicKey = new web3.PublicKey(tokenMintAddress);  
  const {TOKEN_PROGRAM_ID} = splToken

  const fromTokenAccount = await splToken.getOrCreateAssociatedTokenAccount(
    connection,
    wallet.payer,
    mintPublicKey,
    wallet.publicKey
  );

  const destPublicKey = new web3.PublicKey(to);

  // Get the derived address of the destination wallet which will hold the custom token
  const associatedDestinationTokenAddr = await splToken.getOrCreateAssociatedTokenAccount(
    connection,
    wallet.payer,
    mintPublicKey,
    destPublicKey
  );
  

  const receiverAccount = await connection.getAccountInfo(associatedDestinationTokenAddr.address);
        
  const instructions: web3.TransactionInstruction[] = [];  

  
  instructions.push(
    splToken.createTransferInstruction(
      fromTokenAccount.address,
      associatedDestinationTokenAddr.address,
      wallet.publicKey,
      amount,
      [],
      TOKEN_PROGRAM_ID
    )
  );

  const transaction = new web3.Transaction().add(...instructions);
  transaction.feePayer = wallet.publicKey;
  transaction.recentBlockhash = (await connection.getRecentBlockhash()).blockhash;
  
  const transactionSignature = await connection.sendRawTransaction(
    transaction.serialize(),
    { skipPreflight: true }
  );

  await connection.confirmTransaction(transactionSignature);
}