To gain insight into how pathogens adapt to new hosts, Cryptococcus neoformans (H99W) was serially passaged in Galleria mellonella. The phenotypic characteristics of the passaged strain (P15) and H99W were evaluated. P15 grew faster in hemolymph than H99W, in vitro and in vivo, suggesting that adaptation had occurred. However, P15 was more susceptible to hydrogen peroxide in vitro, killed fewer mouse macrophages, and had less fungal burden in human ex vivo macrophages than H99W. Analysis of gene expression changes during Galleria infection showed only a few different genes involved in the reactive oxygen species response. As P15 sheds more GXM than H99W, P15 may have adapted by downregulating hemocyte hydrogen peroxide production, possibly through increased capsular glucuronoxylomannan (GXM) shedding. Hemocytes infected with P15 produced less hydrogen peroxide, and hydrogen peroxide production in response to GXM-shedding mutants was correlated with shed GXM. Histopathological examination of infected larvae showed increased numbers and sizes of immune nodules for P15 compared to H99W, suggesting an enhanced, but functionally defective, response to P15. These results could explain why this infection model does not always correlate with murine models. Overall, C. neoformans’ serial passage in G. mellonella resulted in a better understanding of how this yeast evolves under selection.