Five of 10 patients who commenced successful highly active antiretroviral therapy (HAART) for infection with human immunodeficiency virus type 1 (HIV-1) concurrent with or soon after a diagnosis of cryptococcal infection experienced clinical events characterized by sterile inflammation. Two patients developed aseptic meningitis with elevated intracranial pressure, 1 developed intrathoracic lyphadenopathy with hypercalcemia, 1 developed cavitary pneumonia at the site of a cryptococcal nodule, and 1 developed a supraclavicular abscess. These events occurred 2–11 months after initiation of HAART. For 3 patients, biopsy demonstrated findings atypical for acquired immunodeficiency syndrome—associated cryptococcosis. Results of fungal cultures were negative for all 5 patients, and cryptococcal antigen levels had declined markedly in 4 patients. The timing and clinical features of and biopsy findings for these cases of cryptococcosis suggest the existence of a paradoxical reaction to Cryptococcus infection that occurs in the context of HIV immune restoration.