The basidiomycetous yeasts Cryptococcus neoformans and Cryptococcus gattii are closely related sibling species that cause respiratory and neurological disease in humans and animals. Within these two recognized species, phylogenetic analysis reveals at least six cryptic species defined as molecular types (VNI/II/B, VNIV, VGI, VGII, VGIII, and VGIV) that comprise the pathogenic Cryptococcus species complex. These pathogenic species are clustered in the Filobasidiella clade within the order Tremellales. Previous studies have shown that the Filobasidiella clade also includes several saprobic fungi isolated from insect frass, but information evaluating the relatedness of the saprobes and pathogens within this cluster is limited. Here, the phylogeny encompassing a subset of species in the Tremellales lineage that clusters closely with the pathogenic Cryptococcus species complex was resolved by employing a multilocus sequencing approach for phylogenetic analysis. Six highly conserved genomic loci from 15 related basidiomycete species were sequenced, and the alignments from the concatenated gene sequences were evaluated with different tree-building criteria. Furthermore, these 15 species were subjected to virulence and phenotype assays to evaluate their pathogenic potential. These studies revealed that Cryptococcus amylolentus and Tsuchiyaea wingfieldii, two nonpathogenic sibling species, are the taxa most closely related to the pathogens C. neoformans and C. gattii and together with Filobasidiella depauperata form a Cryptococcus sensu stricto group. Five other saprobic yeast species form the Kwoniella clade, which appears to be a part of a more distantly related sensu lato group. This study establishes a foundation for future comparative genomic approaches that will provide insight into the structure, function, and evolution of the mating type locus, the transitions in modes of sexual reproduction, and the emergence of human pathogenic species from related or ancestral saprobic species.Recent phylogenetic and genomic studies of the fungal kingdom have illustrated that analysis of both distantly and closely related species provides insight into the evolutionary trajectories of fungal species (16,53). The Fungal Tree of Life (AFTOL) project applied a high-resolution multilocus sequencing (MLS) approach to 170 species, elucidating broad and specific evolutionary relationships among species (16). Yet, the entire fungal kingdom encompasses an estimated 1.5 million species (14), many more than can be analyzed by this approach. More than 100 fungi have been subjected to wholegenome analysis, including distantly related but also, in some cases, closely aligned species (53). Taken together, these approaches illustrate that comparisons of closely related species, first by MLS and then by whole-genome studies, can impact our understanding of how closely related pathogenic and saprobic fungi have evolved to occupy specialized niches in nature.