The capsular swelling or quellung reaction was reported almost 100 years ago and described the effect of Abs on the appearance of microbial capsules. Despite widespread use to assess Ab binding to capsules, relatively little is known as to the mechanism of this effect or its biological consequences. The fungus Cryptococcus neoformans is an attractive system to study capsule reactions because it has a large polysaccharide capsule that is readily visible by light microscopy. When viewed by differential interference contrast microscopy, binding of mAb to C. neoformans cells produced two distinct capsular reactions that depended on the Ab epitope specificity and the yeast serotype. In the first pattern, termed “rim,” the capsule appears transparent with a highly refractive outer edge. In the second pattern, termed “puffy,” the capsule appears opaque and lacks a highly refractive outer rim. mAbs that bind with a rim pattern suppress the overall rate of C3 deposition on the yeast via the classical and alternative complement pathways. In contrast, mAbs that bind with a puffy pattern do not affect C3 deposition. Protective and nonprotective IgM mAbs produce rim and puffy patterns, respectively. These results indicate that: 1) capsule reactions are a consequence of Ab-induced changes in capsular refractive index; 2) the type of capsule reaction depends on the Ab specificity; and 3) Ab-induced changes in refractive index correlate with biological activities important for host defense against C. neoformans. Our results provide the first evidence associating distinct capsule reaction patterns with Ab biological activity.