The fungal infection Pneumocystis pneumonia is the most prevalent opportunistic infection in patients with AIDS. Although the analysis of this opportunistic fungal pathogen has been hindered by the inability to isolate it in pure culture, the use of molecular techniques and genomic analysis have brought insights into its complex cell biology. Analysis of the intricate relationship between Pneumocystis and the host lung during infection has revealed that the attachment of Pneumocystis to the alveolar epithelium promotes the transition of the organism from the trophic to the cyst form. It also revealed that Pneumocystis infection elicits the production of inflammatory mediators, culminating in lung injury and impaired gas exchange. Here we discuss these and other recent findings relating to the biology and pathogenesis of this intractable fungus.