The biochemical basis for the reaction to canavanine-glycine-bromthymol blue (CGB) agar by Cryptococcus neoformans var. gattii and C. neoformans var. neoformans was investigated. All of the var. gattii isolates tested were found to utilize glycine as the sole source of carbon and nitrogen and were resistant to L-canavanine. Only 11% of the serotype D isolates of var. neoformans utilized glycine as the sole source of carbon and nitrogen, but these were all sensitive to canavanine. Nineteen percent of the serotype A isolates of var. neoformans were able to assimilate glycine, and 81% of the glycine users were resistant to canavanine. However, these canavanine-resistant, glycine-assimilating, var. neoformans isolates failed to grow when they were cultured on a medium containing glycine and canavanine. Unlike the var. neoformans isolates, all of the var. gattii isolates tested grew on a medium that contained both of these compounds. Glycine-utilizing isolates exhibited good uptake of the amino acid, and a glycine-cleaving enzyme was discernable in the isolate. The isolates that fail to utilize glycine accumulated the amino acid at a rate which was barely 15% of that seen in the glycine users, and no glycine-cleaving enzyme was apparent within the 48-hr incubation period. When a cell-free extract (which had been derived from a glycine-utilizing isolate), was incubated with 14C-labeled glycine, ammonia, radiolabeled CO2, and serine were produced. The glycine decarboxylase activity of the cell-free extract was found to be enhanced by the addition of dithiothreitol, tetrahydrofolate, pyridoxal phosphate, and nicotinamide adenine dinucleotide (NAD). The ammonia released during glycine cleavage seems to be responsible for the positive reaction on CGB medium.