The basidiomycete Cryptococcus neoformans is an opportunistic human fungal pathogen that causes cryptococcal meningitis predominantly in immunocompromised patients. A well-defined sexual life cycle (20–22, 25) and the establishment of various molecular biological tools make this organism an excellent model system for studies of fungal pathogenicity (8). The life cycle of C. neoformans is characterized by a dimorphic transition between a haploid yeast form and a dikaryotic filamentous form (1). After a haploid cell senses a cell of opposite mating type (MATa or MATα), the cells produce filament-like structures called conjugation tubes that protrude toward the mating partner. After cell fusion, a dikaryotic mycelium is generated, composed of filaments characterized by unfused parental nuclei and fused clamp connections. Under proper environmental conditions, the tips of these filaments develop into swollen cells termed basidia. Within this new structure, karyogamy occurs followed by meiosis to generate four recombinant haploid nuclei. The haploid nuclei divide mitotically and bud off from the basidium to generate four long chains of basidiospores. These spores germinate and produce vegetative, yeast cells. The diploid phase of C. neoformans is normally transient, and therefore most environmental and clinical isolates are haploid. Nevertheless, rare diploid isolates have been reported based on assays determining cellular DNA contents (33–35), the analysis of randomly amplified polymorphic DNA markers (4, 37), or isozyme analysis (5). Furthermore, we and others isolated diploid strains following defined genetic crosses (32, 38, 39). Interestingly, most of the environmental and clinical isolates that are thought to be diploid belong to the unusual class of serotype AD strains (5, 34). C. neoformans has been classified into three varieties based in part on serological differences in capsular antigens. Serotype A and D strains each belong to a separate variety (varieties grubii and neoformans, respectively), whereas serotype B and C strains are classified as a single variety (variety gattii) (16, 23). A fifth, unusual serotype, AD, has also been described but is much less common than the four predominant serotypes. DNA sequence analysis has revealed that serotype B and C strains are phylogenetically much more closely related to each other than to A or D strains, which in turn are estimated to have diverged from each other approximately 18 million years ago (13, 42). Karyotype analysis revealed that the average chromosome number for C. neoformans is between 12 and 13 (28, 29, 41). The smallest chromosomes in variety gattii are 400 to 700 kb in size, whereas the smallest chromosomes of varieties neoformans and grubii are approximately 770 kb. Nucleotide sequence comparison of the URA5 gene revealed ∼8% sequence divergence between variety gattii and variety neoformans or grubii (7, 14) and ∼5% sequence divergence between varieties neoformans and grubii. Here we have characterized strains of the unusual serotype AD class to establish their origin. By fluorescence-activated cell sorter (FACS) analysis we found that serotype AD strains are diploid or aneuploid (>1n but ≤2n). Second, by PCR analysis we showed that these strains are heterozygous for serotype A- and D-specific alleles and the MATa and MATα mating-type loci. Third, we found that three serotype AD strains were self-fertile and produced filaments, basidia, and basidiospores that germinated poorly (∼5%) to produce progeny that were still diploid or aneuploid. Our findings reveal that serotype AD strains are hybrids produced by crosses between serotype A and D parental strains and suggest that evolutionary divergence and sequence differences prevent proper chromosome segregation during meiosis in AD hybrid strains.