Ten isolates of Cryptococcus neoformans recovered from individual patients with the acquired immunodeficiency syndrome (AIDS) were studied in conjunction with three other isolates from non-AIDS patients. On primary culture nine out of ten of the AIDS isolates grew as nonmucoid, dry, pasty colonies resembling those produced by “diphtheroids.” One isolate formed moist colonies. In contrast, the three non-AIDS Cryptococcus neoformans isolates produced highly mucoid colonies. India ink mounts of primary cultures of the ten AIDS isolates after 48 hours incubation in 5% CO2 showed markedly smaller capsules than the three non-AIDS isolates. India ink preparations of fresh cerebrospinal fluid of two specimens from AIDS patients in which capsule sizes were systematically determined showed a few moderately encapsulated cells dispersed among numerous others that were poorly encapsulated. This observation was confirmed in mucicarmine-stained smears of cerebrospinal fluid. Poorly encapsulated Cryptococcus neoformans seem to be associated with infections in AIDS patients.