The pathogen Crytococcus neoformans has been traditionally grouped in two varieties, C. neoforrmans var. neoformans (serotypes A, D and AD) and C. neoformans var. gattii (serotypes B and C). A recent taxonomic evaluation of C. neoformans var. neoformans described C. neoformans var. grubii as a new variety represented by serotype A isolates. Despite immunological, biochemical, ecological and molecular differences the three varieties are classified within one species. We examined the genetic variability of one hundred and five clinical and environmental isolates that included all varieties and serotypes. Sequence analysis of the intergenic spacer (IGS) associated with rDNA revealed significant differences in nucleotide composition between and within the varieties. Parsimony analysis showed five different genotypes representing distinct genetic lineages. Although there was a high degree of relatedness between serotype and genotype this relatedness was not exclusive as serotypes were not restricted to one particular genotypic group. Serotyping and sequence analyses indicate that C. neoformans var. grubii (serotype A) should not be recognized as a separate variety. Based on this study we propose to accept two separate species, C. neoformans (serotypes A, D and AD) and C. bacillisporus (serotypes B and C synonymous with C. neoformans var. gattii).