Cryptococcus gattii is a pathogenic yeast that together with Cryptococcus neoformans causes cryptococcosis in humans and animals. High numbers of viable C. gattii propagules can be obtained from certain species of Australian Eucalyptus camaldulensis trees, and an epidemiological link between Eucalyptus colonization and human exposure has been proposed. However, the highest prevalence of C. gattii cryptococcosis occurs in Papua New Guinea and in regions of Australia where the eucalypt species implicated to date are not endemic. This study investigated the population structure of three geographically distinct clinical and veterinary populations of C. gattii from Australia and Papua New Guinea. All populations that consisted of a genotype found frequently in Australia (VGI) were strongly clonal and were highly differentiated from one another. Two populations of the less common VGII genotype from Sydney and the Northern Territory had population structures inferring recombination. In addition, there was some evidence of reduced genetic differentiation between these geographically remote regions. In a companion study presented in this issue, VGII isolates were overwhelmingly more fertile than those of the VGI genotype, giving biological support to the indirect assessment of sexual exchange. It appears that the VGI genotype propagates clonally on eucalypts in Australia and on an unknown substrate in Papua New Guinea, with infection initiated by an unidentified infectious propagule. VGII isolates are completing their life cycles and may be dispersed via sexually produced basidiospores, which are also likely to initiate respiratory infection.