Cryptococcus neoformans is an environmental yeast that is a leading cause of fatal mycosis in AIDS patients and a major cause of meningoencephalitis and CNS-related mortality around the globe. Although C. neoformans infection is mostly a manifestation of immune deficiency, up to 25% of cases reported in the USA occur in patients without recognizable immune defects, indicating that C. neoformans can develop mechanisms that allow it to evade immune defenses and persist in noncompromised hosts. This article discusses mechanisms and routes of infection and the most important elements of host response as well as the mechanisms that promote cryptococcal survival within the host. Metabolic adaptation to physiological host conditions and the mechanisms limiting immune recognition, interfering with phagocytosis and extending intracellular survival of C. neoformans are highlighted. We describe the mechanisms by which C. neoformans can alter adaptive host responses, especially cell-mediated immunity, which is required for clearance of this microbe. We also review cryptococcal strategies of survival in the CNS and briefly discuss adaptations developing in response to medical treatment.