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A diabetic renal transplant recipient with cellulitis caused by Cryptococcus neoformans, serotype A, is described. The diagnosis was based on the demonstration of capsulated, budding yeast cells in the aspirated material and tissue from the cellulitic lesion and isolation of the aetiological agent in culture. The isolate formed well-developed capsules in the brain tissue of experimentally infected mice and produced cherry-brown colonies on niger seed medium. The patient's serum was positive for cryptococcal antigen (titre 1 : 4) with no other evidence of systemic infection. He was successfully treated with AmBisome, followed by fluconazole, resulting in the complete resolution of cellulitis and disappearance of the cryptococcal antigen. This report underscores the fact that patients with cutaneous cryptococcosis should be thoroughly evaluated, as it may be the first manifestation of a systemic disease. Prompt diagnosis and treatment are important to improve survival.