Macrophage cytotoxicity for Cryptococcus neoformans was investigated by culturing human alveolar macrophage (AM) with a thin-capsuled clone of C. neoformans. Under appropriate conditions, fungal replication was inhibited in the presence of human AM. The effect persisted over the 48-h time course that was evaluated. Human AM did not require endotoxin, fetal calf serum, or specific rabbit anticryptococcal antibody for fungistasis. Under these conditions, microscopic evaluation of a cytocentrifuge preparation of AM-yeast cocultures, stained by a modified Giemsa technique, revealed all the fungi to be extracellular. In the presence of 10 percent fresh human serum, AM phagocytized C. neoformans and exhibited fungicidal activity. Tumor necrosis factor did not affect the replication rate of the yeast. These findings suggest that there may be at least 2 mechanisms by which human AM protect against C. neoformans. One is serum-independent and extracellular and results in fungistasis, and the other is dependent on a serum factor and leads to intracellular inhibition of growth and possibly killing of the organism.