While laccase of Cryptococcus neoformans is implicated in the virulence of the organism, our recent studies showing absence of melanin in the infected mouse brain has led us to a search for alternative roles for laccase in cryptococcosis. We investigated the role of laccase in protection of C. neoformans against murine alveolar macrophage (AM)-mediated antifungal activity by using a pair of congenic laccase-positive (2E-TUC) and laccase-deficient (2E-TU) strains. The laccase-positive cells with laccase derepression were more resistant to the antifungal activity of AM than a laccase-deficient strain ([28.9 ± 1.2]% versus [40.2 ± 2.6]% killing). Addition of l-dopa toCryptococcus to produce melanin in a laccase-positive strain resulted in a slight increase in protection of C. neoformans from the antifungal activity of macrophages ([25.4 ± 3.4]% versus [28.9 ± 1.2]% killing). Recombinant cryptococcal laccase exhibited iron oxidase activity in converting Fe(II) to Fe(III). Moreover, recombinant laccase inhibited killing of C. neoformans by hydroxyl radicals catalyzed by iron in a cell-free system. Addition of the hydroxyl radical scavenger mannitol or dimethyl sulfoxide to AMs prior to the introduction of cryptococcal cells decreased killing of both strains and reduced the difference in susceptibility between the laccase-positive and laccase-deficient strains. Furthermore, laccase-mediated protection from AM killing was inhibited by the addition of Fe(II), presumably by overcoming the effects of the iron oxidase activity of cryptococcal laccase. These results suggest that the iron oxidase activity of laccase may protect C. neoformans from macrophages by oxidation of phagosomal iron to Fe(III) with a resultant decrease in hydroxyl radical formation.