Infection with Cryptococcus neoformans begins when desiccated yeast cells or spores are inhaled and lodge in the alveoli of the lungs. A subset of cryptococcal cells in the lungs differentiate into enlarged cells, referred to as titan cells. Titan cells can be as large as 50 to 100 μm in diameter and exhibit a number of features that may affect interactions with host immune defenses. To characterize the effect of titan cell formation on the host-pathogen interaction, we utilized a previously described C. neoformans mutant, the gpr4Δ gpr5Δ mutant, which has minimal titan cell production in vivo. The gpr4Δ gpr5Δ mutant strain had attenuated virulence, a lower CFU, and reduced dissemination compared to the wild-type strain. Titan cell production by the wild-type strain also resulted in increased eosinophil accumulation and decreased phagocytosis in the lungs compared to those with the gpr4Δ gpr5Δ mutant strain. Phagocytosed cryptococcal cells exhibited less viability than nonphagocytosed cells, which potentially explains the reduced cell survival and overall attenuation of virulence in the absence of titan cells. These data show that titan cell formation is a novel virulence factor in C. neoformans that promotes establishment of the initial pulmonary infection and plays a key role in disease progression.