Two separate carbamoyl phosphate synthetase activities are required for the de novo synthesis of pyrimidines and arginine in most eukaryotes. Toxoplasma gondii is novel in possessing a single carbamoyl phosphate synthetase II gene that corresponds to a glutamine-dependent form required for pyrimidine biosynthesis. We therefore examined arginine acquisition in T. gondii to determine whether the single carbamoyl phosphate synthetase II activity could provide both pyrimidine and arginine biosynthesis. We found that arginine deprivation efficiently blocks the replication of intracellular T. gondii, yet has little effect on long-term parasite viability. Addition of citrulline, but not ornithine, rescues the growth defect observed in the absence of exogenous arginine. This rescue with citrulline is ablated when parasites are cultured in a human citrullinemia fibroblast cell line that is deficient in argininosuccinate synthetase activity. These results reveal the absence of genes and activities of the arginine biosynthetic pathway and demonstrate that T. gondii is an arginine auxotroph. Arginine starvation was also found to efficiently trigger differentiation of replicative tachyzoites into bradyzoites contained within stable cyst-like structures. These same parasites expressing bradyzoite antigens can be efficiently switched back to rapidly proliferating tachyzoites several weeks after arginine starvation. We hypothesise that the absence of gene activities that are essential for the biosynthesis of arginine from carbamoyl phosphate confers a selective advantage by increasing bradyzoite switching during the host response to T. gondii infection. These findings are consistent with a model of host-parasite evolution that allowed host control of bradyzoite induction by trading off virulence for increased transmission.