Capsule formation plays a significant role in the pathogenicity of Cryptococcus neoformans. To study the molecular basis of capsule synthesis, the capsule-deficient phenotype of a mutant strain was complemented by transformation. A plasmid rescued from the resulting Cap⁺ transformant complemented a cap59 mutation which was mapped previously by classical recombination analysis. Gene deletion by homologous integration resulted in an acapsular phenotype, indicating that we have identified the CAP59 gene. The CAP59 gene was assigned to chromosome I by Southern blot analysis of contour-clamped homogeneous electric field gel electrophoresis-resolved chromosomes of C. neoformans var. neoformans. Sequence comparison of genomic and cDNA clones indicated the presence of six introns. CAP59 encoded a 1.9-kb transcript and a deduced protein of 458 amino acids. Analysis of the nucleotide sequence revealed little similarity to existing sequences in the data bank. When the capsule-deficient phenotype was complemented, the originally avirulent C. neoformans strain became virulent for mice. In addition, the acapsular strain created by gene deletion of CAP59 lost its virulence. This work demonstrates the molecular basis for capsule-related virulence and that the CAP59 gene is required for capsule formation.