Cryptococcus neoformans is a basidiomycete fungal pathogen of humans that has diverged considerably from other model fungi such as Neurospora crassa, Aspergillus nidulans, Saccharomyces cerevisiae and the common human fungal pathogen Candida albicans. The recent completion of the genome sequences of two related C. neoformans strains and the ongoing genome sequencing of three other divergent Cryptococcus strains with different virulence phenotypes and environmental distributions should improve our understanding of this important pathogen. We discuss the biology of C. neoformans in light of this genomic data, with a special emphasis on the role that evolution and sexual reproduction have in the complex relationships of the fungus with the environment and the host.