In exploring the evolutionary trajectories of both pathogenesis and karyotype dynamics in fungi, we conducted a large-scale comparative genomic analysis spanning the Cryptococcus genus, encompassing both global human fungal pathogens and nonpathogenic species, and related species from the sister genus Kwoniella. Chromosome-level genome assemblies were generated for multiple species, covering virtually all known diversity within these genera. Although Cryptococcus and Kwoniella have comparable genome sizes (about 19.2 and 22.9 Mb) and similar gene content, hinting at preadaptive pathogenic potential, our analysis found evidence of gene gain (via horizontal gene transfer) and gene loss in pathogenic Cryptococcus species, which might represent evolutionary signatures of pathogenic development. Genome analysis also revealed a significant variation in chromosome number and structure between the 2 genera. By combining synteny analysis and experimental centromere validation, we found that most Cryptococcus species have 14 chromosomes, whereas most Kwoniella species have fewer (11, 8, 5, or even as few as 3). Reduced chromosome number in Kwoniella is associated with formation of giant chromosomes (up to 18 Mb) through repeated chromosome fusion events, each marked by a pericentric inversion and centromere loss. While similar chromosome inversion–fusion patterns were observed in all Kwoniella species with fewer than 14 chromosomes, no such pattern was detected in Cryptococcus. Instead, Cryptococcus species with less than 14 chromosomes showed reductions primarily through rearrangements associated with the loss of repeat-rich centromeres. Additionally, Cryptococcus genomes exhibited frequent interchromosomal translocations, including intercentromeric recombination facilitated by transposons shared between centromeres. Overall, our findings advance our understanding of genetic changes possibly associated with pathogenicity in Cryptococcus and provide a foundation to elucidate mechanisms of centromere loss and chromosome fusion driving distinct karyotypes in closely related fungal species, including prominent global human pathogens.