Cryptococcus neoformans is a fungal pathogen with worldwide distribution. C. neoformans resides within mature phagolysosomes where it often evades killing and replicates. C. neoformans induces phagolysosomal membrane permeabilization (PMP), but the mechanism for this phenomenon and its consequences for macrophage viability are unknown. In this study, we used flow cytometry methodology in combination with cell viability markers and LysoTracker to measure PMP in J774. 16 and murine bone marrow–derived macrophages infected with C. neoformans. Our results showed that cells manifesting PMP were positive for apoptotic markers, indicating an association between PMP and apoptosis. We investigated the role of phospholipase B1 in C. neoformans induction of PMP. Macrophages infected with a C. neoformans Δplb1 mutant had reduced PMP compared with those infected with wild-type and phospholipase B1–complemented strains, suggesting a mechanism of action for this virulence factor. Capsular enlargement inside macrophages was identified as an additional likely mechanism for phagolysosomal membrane damage. Macrophages undergoing apoptosis did not maintain an acidic phagolysosomal pH. Induction of PMP with ciprofloxacin enhanced macrophages to trigger lytic exocytosis whereas nonlytic exocytosis was common in those without PMP. Our results suggest that modulation of PMP is a critical event in determining the outcome of C. neoformans–macrophage interaction.