The ecology of Cryptococcus neoformans and the epidemiology of cryptococcosis are reviewed. Two varieties of C. neoformans have been recognized. C. neoformans variety neoformans has been found in nature worldwide, primarily in association with bird droppings, although nonavian sources have also been found. Most cases of human cryptococcosis are caused by this variety. C. neoformans var. gattii has recently been isolated in nature in association with Eucalyptus trees. Infections caused by this variety occur mainly in tropical and subtropical regions. Because exposure to C. neoformans is probably common and clinically apparent cases of cryptococcosis in healthy hosts are rare, it is presumed that most people can mount adequate host defenses upon exposure to the organism. At least 5%-10% of patients with AIDS become infected with Cryptococcus; the epidemiology of this infection is different in many respects from that seen in patients without AIDS.