Cryptococcus neoformans is an important fungal pathogen in both immunocompromised and immunocompetent hosts. The mean annual incidence during 1994-1997 was 6.6 cases per million people per year in Australia, and 2.2 cases per million people per year in New Zealand. C. neoformans var. neoformans caused 85% of 312 episodes (98% of episodes in immunocompromised hosts) and C. neoformans var. gattii caused 15% (44% in immunocompetent hosts). The AIDS-specific incidence declined significantly over the 3 years. Mortality from cryptococcosis remains substantial. In trials involving small numbers of AIDS patients, liposomal amphotericin B (AmBisome) was found to be active against C. neoformans, with mycological response rates of 67-85%; however, maintenance therapy with an oral antifungal agent is required indefinitely. In a randomized study of patients with cryptococcal meningitis, AmBisome (4 mg/kg/day) produced mycological eradication in 73% of patients compared with 38% with conventional amphotericin. AmBisome resulted in significantly earlier sterilization of cerebrospinal fluid than conventional amphotericin (7-14 days versus 21 days) and was less nephrotoxic. The benefit of this reduced toxicity is denied to many patients because of an enormous cost barrier. In a survey of the practices of clinical mycologists in Australia, 11 experts responded to a questionnaire survey regarding the use of available lipid preparations. Their indications for use as initial therapy were mucormycosis (7/10), renal failure (7/10), Fusarium infection (2/10) and aspergillosis (2/10). Cryptococcosis, candidosis and febrile neutropenia were rarely regarded as an indication; failed therapy with conventional amphotericin was an indication to use AmBisome for 8/11 respondents. The majority believed that AmBisome was equivalent to conventional amphotericin, with amphotericin B lipid complex and AmBisome equivalent to each other in terms of efficacy. The main barrier to replacement of conventional amphotericin with lipid preparations was seen as an issue of cost.