In the presence of serum, whole cells of encapsulated and non-encapsulated Cryptococcus neoformans generated a chemotactic response by neutrophils. Heat inactivation of serum ablated all chemotactic activity. Cryptococcal polysaccharide was not chemotaxigenic. Assays for alternative complement pathway activation such as depletion of alternative complement pathway factor B or electrophoretic conversion of factor B closely paralleled chemotaxis assays. Cells of encapsulated and non-encapsulated C. neoformans activated the alternative complement pathway, whereas cryptococcal polysaccharide was inactive. Failure of the capsular material to activate the alternative pathway was not due to serotype specificity because polysaccharide of several serotypes failed to achieve activation. The results suggest that chemotaxigenesis and alternative complement pathway activation are functions of the yeast cell wall. The results support our proposal that the cryptococcal capsul does not prevent potential opsonins from reaching binding and activation sites at the yeast cell wall or the release of biologically active soluble cleavage products into the surrounding medium; however, cell wall-bound cleavage products remain bound to the cell wall beneath the capsule. Therefore, they are unable to participate as opsonins in phagocytosis.