The availability of the whole-genome sequence from the 2 known varieties of the human pathogenic fungus Cryptococcus neoformans provides an opportunity to study the relative contribution of divergence and introgression during the process of speciation in a genetically tractable organism. At the genomic level, these varieties are nearly completely syntenic, share approximately 85-90% nucleotide identity, and are believed to have diverged approximately 18 MYA. Via a comparative genomic approach, we identified a 14-gene region (approximately 40 kb) that is nearly identical between the 2 varieties that resulted from a nonreciprocal transfer event from var. grubii to var. neoformans approximately 2 MYA. The majority of clinical and environmental var. neoformans strains from around the world contain this sequence obtained from var. grubii. This introgression event likely occurred via an incomplete intervarietal sexual cycle, creating a hybrid intermediate where mobile elements common to both lineages mediated the exchange. The subsequent duplication in laboratory strains of a fragment of this same genomic region supports evolutionary theories that instabilities in subtelomeric regions promote adaptive evolution through gene amplification and subsequent adaptation. Along with a more ancient predicted transfer event in C. neoformans and a recently reported example from Saccharomyces cerevisiae, these data indicate that DNA exchange between closely related sympatric varieties or species may be a recurrent theme in the evolution of fungal species. It further suggests that although evolutionary divergence is the primary force driving speciation, rare introgression events also play a potentially important role.