Cryptococcus neoformans is a ubiquitous environmental yeast and a leading cause of invasive fungal infection in humans. The most recent estimate of global disease burden includes over 200,000 cases of cryptococcal meningitis each year. Cryptococcus neoformans expresses several virulence factors that may have originally evolved to protect against environmental threats, and human infection may be an unintended consequence of these acquired defenses. Traditionally, C. neoformans has been viewed as a purely opportunistic pathogen that targets severely immune compromised hosts; however, during the past decade the spectrum of susceptible individuals has grown considerably. In addition, the closely related strain Cryptococcus gattii has recently emerged in North America and preferentially targets individuals with intact immunity. In parallel to the changing epidemiology of cryptococcosis, an increasing role for host immunity in the pathogenesis of severe disease has been elucidated. Initially, the HIV/AIDS epidemic revealed the capacity of C. neoformans to cause host damage in the absence of adaptive immunity. Subsequently, the development and clinical implementation of highly active antiretroviral treatment (HAART) led to recognition of an immune reconstitution inflammatory syndrome (IRIS) in a subset of HIV+ individuals, demonstrating the pathological role of host immunity in disease. A post-infectious inflammatory syndrome (PIIRS) characterized by abnormal T cell-macrophage activation has also been documented in HIV-negative individuals following antifungal therapy. These novel clinical conditions illustrate the highly complex host-pathogen relationship that underlies severe cryptococcal disease and the intricate balance between tolerance and resistance that is necessary for effective resolution. In this article, we will review current knowledge of the interactions between cryptococci and mammalian hosts that result in a tolerant phenotype. Future investigations in this area have potential for translation into improved therapies for affected individuals.