The extracellular polysaccharide capsule produced by Cryptococcus neoformans is essential for its pathogenicity. We have isolated and characterized a gene, (AP64, which is required for capsule formation. An encapsulated strain created by complementation of the cap64 mutation produced fatal infection of mice within 25 days, while the cap64 acapsular strain was avirulent. Gene deletion of CAP64 from a wild-type strain resulted in the loss of capsule as well as virulence. Contour-clamped homogeneous electric field gel analysis indicates that CAP64 is located on chromosome III which is different from the localization of another capsule-related gene, CAP59. The nonlinkage between CAP64 and CAP59 was also supported by classical recombinational analysis. Database searches did not reveal any sequence with high similarity to CAP64. We also found that the CAP64 locus is contiguous to a convergently transcribed gene which has significant similarity to the gene encoding the yeast proteasome subunit, PRE1. The distance between the cDNA ends of these two genes is only 22 bp. This study confirms the previous molecular genetic evidence that capsule is an essential factor for the virulence of C. neoformans in the murine model.