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The evolutionary drivers of speciation are critical to our understanding of how new pathogens arise from nonpathogenic lineages and adapt to new environments. Here we focus on the Cryptococcus amylolentus species complex, a nonpathogenic fungal lineage closely related to the human-pathogenic Cryptococcus neoformans/Cryptococcus gattii complex. Using genetic and genomic analyses, we reexamined the species boundaries of four available isolates within the C. amylolentus complex and revealed three genetically isolated species. Their genomes are ∼6% divergent and exhibit chromosome rearrangements, including translocations and small-scale inversions. Although two of the species (C. amylolentus and newly described C. floricola) were still able to interbreed, the resulting hybrid progeny were usually inviable or sterile, indicating that barriers to reproduction had already been established. These results advance our understanding of speciation in fungi and highlight the power of genomics in assisting our ability to correctly identify and discriminate fungal species., Speciation is a central mechanism of biological diversification. While speciation is well studied in plants and animals, in comparison, relatively little is known about speciation in fungi. One fungal model is the Cryptococcus genus, which is best known for the pathogenic Cryptococcus neoformans/Cryptococcus gattii species complex that causes >200,000 new human infections annually. Elucidation of how these species evolved into important human-pathogenic species remains challenging and can be advanced by studying the most closely related nonpathogenic species, Cryptococcus amylolentus and Tsuchiyaea wingfieldii. However, these species have only four known isolates, and available data were insufficient to determine species boundaries within this group. By analyzing full-length chromosome assemblies, we reappraised the phylogenetic relationships of the four available strains, confirmed the genetic separation of C. amylolentus and T. wingfieldii (now Cryptococcus wingfieldii), and revealed an additional cryptic species, for which the name Cryptococcus floricola is proposed. The genomes of the three species are ∼6% divergent and exhibit significant chromosomal rearrangements, including inversions and a reciprocal translocation that involved intercentromeric ectopic recombination, which together likely impose significant barriers to genetic exchange. Using genetic crosses, we show that while C. wingfieldii cannot interbreed with any of the other strains, C. floricola can still undergo sexual reproduction with C. amylolentus. However, most of the resulting spores were inviable or sterile or showed reduced recombination during meiosis, indicating that intrinsic postzygotic barriers had been established. Our study and genomic data will foster additional studies addressing fungal speciation and transitions between nonpathogenic and pathogenic Cryptococcus lineages.