Cryptococcus species are common on leaf surfaces, but the foremost pathogen of the 37 genus members is Cryptococcus neoformans, which can cause the infection cryptococcosis in cats, dogs, horses, cattle, and humans.

For many years it was assumed that encapsulated yeast cells of Cryptococcus neoformans were inhaled from dried, powdered bird droppings, causing the infection. Yet, a sexual stage of the fungus which leads to the release of small airborne spores that are the ideal size for deposition in the lungs have been discovered in laboratory studies. Although the spores are now thought to be the primary means of infection, their environmental source is unknown.

Many animals and people may be exposed to Cryptococcus neoformans without developing infection. The most common predisposition factor for developing cryptococcosis is immune system problems, such as feline immunodeficiency virus (FIV) in cats and acquired immunodeficiency syndrome (AIDS) in humans. Once in the lungs, infection may heal on its own, remain localized, or spread throughout the body. In cats and dogs the infection frequently spreads to the eyes, skin and central nervous system. In humans, pulmonary disease and cryptococcocal meningitis are the most frequent manifestations. Although cryptococcosis infects humans and animals, there are no documented cases of transmission between the species.