Iron is tightly controlled in mammalian tissues and regulates virulence factors in various pathogenic organisms. The influence of Fe availability upon production of cryptococcal capsular polysaccharide was studied. Polysaccharide, measured as cell-bound glucuronyl residues, increased more than threefold as available Fe in the culture medium was varied from repletion to tight sequestration and depletion in five incremental steps. Since physiologic CO2 concentration may serve as stimulus for cryptococcal polysaccharide synthesis, the combined effect of Fe availability and CO2 on encapsulation was studied. Addition of dissolved, loosely chelated Fe moderated the effect of CO2. Tight chelation of dissolved Fe potentiated the CO2 effect. Tissue from infected mice showed heavily encapsulated organisms, consistent with results with physiologic CO2 concentration and Fe deprivation. In conclusion, cryptococcal polysaccharide synthesis is increased by limitation of ferric iron availability to the cell and by dissolved CO2, and the two effects are additive.