The polysaccharide capsule is known to be the major factor required for the virulence of Cryptococcus neoformans. We have cloned and characterized a gene, designated CPS1, that encodes a protein containing a glycosyltransferase moiety and shares similarity with the type 3 polysaccharide synthase encoded by the cap3B gene of Streptococcus pneumoniae. Cps1p also shares similarity with hyaluronan synthase of higher eukaryotes. Deletion of the CPS1 gene from a serotype D strain of C. neoformans resulted in a slight reduction of the capsule size as observed by using an India ink preparation. The growth at 37 degrees C was impaired, and the ability to associate with human brain endothelial cells in vitro was also significantly reduced by the deletion of CPS1. Using site-specific mutagenesis, we showed that the conserved glycosyltransferase domains are critical for the ability of the strain to grow at elevated temperatures. A hyaluronan enzyme-linked immunosorbent assay method demonstrated that CPS1 is important for the synthesis of hyaluronan or its related polysaccharides in C. neoformans. Comparisons between the wild-type and the cps1Delta strains, using three different transmission electron microscopic methods, indicated that the CPS1 gene product is involved in the composition or maintenance of an electron-dense layer between the outer cell wall and the capsule. These and the virulence studies in a mouse model suggested that the CPS1 gene is important in the pathobiology of C. neoformans.