Cryptococcosis, caused by an encapsulated fungus, Cryptococcus neoformans, has emerged as a life threatening infection in HIV positive individuals and other immunocompromised hosts. The present review describes laccase and its product melanin as an important virulence factor of Cryptococcus neoformans and illustrates the approaches used in elucidating the pathogenesis of cryptococcosis. Characterization of the biochemical pathways leading to melanin synthesis is summarized using biochemical and biomolecular approaches. Melanin synthesis is dependent on a single copper-dependent enzyme, laccase. Since the mammalian host does not contain this enzyme, laccase is an attractive candidate for the study of fungal pathogenesis, as well as a drug target. The cloning of the CNLAC1 gene and construction of CNLAC1 gene knock-out strains has confirmed its role in the virulence of Cryptococcus. Also described is the role of melanin in the host-pathogen interactions. Melanin may protect Cryptococcus cells by a variety of methods including anti-oxidant or cell wall surface effects thereby offering protection against numerous effectors of cellular immunity.