A conclusive model for the formation of dwarf spheroidal (dSph) galaxies still remains elusive. Owing to their proximity to the massive spirals Milky Way (MW) and M31, various environmental processes have been invoked to explain their origin. In this context, the tidal stirring model postulates that interactions with MW-sized hosts can transform rotationally supported dwarfs, resembling present-day dwarf irregular (dIrr) galaxies, into systems with the kinematic and structural properties of

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... s. Using N-body+SPH simulations, we investigate the dependence of this transformation mechanism on the gas fraction, fgas, in the disk of the progenitor dwarf. Our numerical experiments incorporate for the first time the combined effects of radiative cooling, ram-pressure stripping, star formation, supernova (SN) winds, and a cosmic UV background. For a given orbit inside the primary galaxy, rotationally supported dwarfs with gas fractions akin to those of observed dIrrs (fgas >= 0.5), demonstrate a substantially enhanced likelihood and efficiency of transformation into dSphs relative to their collisionless (fgas = 0) counterparts. We argue that the combination of ram-pressure stripping and SN winds causes the gas-rich dwarfs to respond more impulsively to tides, augmenting their transformation. When fgas >= 0.5, disky dwarfs on previously unfavorable low-eccentricity or large-pericenter orbits are still able to transform. On the widest orbits, the transformation is incomplete; the dwarfs retain significant rotational support, a relatively flat shape, and some gas, naturally resembling transition-type systems. We conclude that tidal stirring constitutes a prevalent evolutionary mechanism for shaping the structure of dwarf galaxies within the currently favored CDM cosmological paradigm.