Cryptococcal phospholipase (PLB1) is a secreted enzyme with lysophospholipase hydrolase and lysophospholipase transacylase activities. To investigate the role of PLB1 in the evasion of host immune responses, we characterized pulmonary immune responses to the parental (H99), the plb1 mutant, and the plb1^rec reconstituted mutant strains of Cryptococcus neoformans in mice. PLB1 was required for virulence during infection acquired via the respiratory tract. Mice infected with either H99 or the plb1^rec strain generated a nonprotective inflammatory response with subsequent eosinophilia, while mice infected with the plb1 mutant generated a protective immune response that controlled the infection. Because PLB1 is believed to facilitate virulence through host cell lysis, we examined the interaction of these strains with macrophages. The plb1^rec mutant exhibited decreased survival during coculture with macrophages. One factor which may be involved in the survival of yeast in the presence of macrophages is fungal eicosanoid production. Host eicosanoids have been shown to down-modulate macrophage functions. plb1 exhibited a defect in eicosanoid production derived from exogenous arachidonoyl-phosphatidylcholine, suggesting that PLB1 is required for the release of arachidonic acid from phospholipids. These data suggest that cryptococcal PLB1 may act as a virulence factor by enhancing the ability to survive macrophage antifungal defenses, possibly by facilitating fungal eicosanoid production.