Disseminated cryptococcosis caused by Cryptococcus gattii (molecular type VGI) was diagnosed in an adult free-ranging female koala (Phascolarctos cinereus). Subclinical cryptococcosis was later diagnosed in this koala's joey. In the adult koala, a pathological fracture of the tibia was associated with the bone lysis of marked focal cryptococcal osteomyelitis. Limb-sparing orthopedic intervention, in the setting of disseminated cryptococcosis, was judged to have a poor prognosis, and the adult koala was euthanized. The joey was removed and hand-reared. Serological testing revealed persistent and increasing cryptococcal capsular antigenemia in the absence of clinical signs of disease and it was subsequently treated with oral fluconazole for approximately 16 months, rehabilitated and released into the wild. It was sighted 3 months post-release in a good state of health and again at 18 months post-release but was not recaptured on either occasion. This is the first published report of cryptococcal appendicular osteomyelitis in a koala. It is also the first report of concurrent disease in a dependent juvenile and the successful treatment of subclinical cryptococcosis to full resolution of the cryptococcal antigenemia in a free-ranging koala. This paper provides a discussion of cryptococcal osteomyelitis in animals, host-pathogen-environment interactions and treatment and monitoring protocols for cryptococcosis in koalas. Published reports describing the treatment of cryptococcosis in koalas are also collated and summarised.