Macrophages cultured from human peripheral blood monocytes were infected with Cryptococcus neoformans in vitro. Although C. neoformans were actively ingested, there was no detectable intracellular killing by macrophages. Over 2 days or more, intracellular fungi grew more rapidly than a corresponding inoculum of extracellular cryptococci growing in tissue culture medium containing human serum. Macrophages were induced to develop into cells which appeared to be activated by morphological and phagocytic criteria. However, these activated cells did not acquire an ability to kill or inhibit intracellular growth of C. neoformans. There were no detectable differences between macrophages from normal subjects and those from cryptococcosis patients.