Cryptococcus gattii is an emerging fungal pathogen on the west coast of Canada and the United States that causes a potentially fatal infection in otherwise healthy individuals. In previous investigations of the mechanisms by which C. gattii might subvert cell-mediated immunity, we found that C. gattii failed to induce dendritic cell (DC) maturation, leading to defective T cell responses. However, the virulence factor and the mechanisms of evasion of DC maturation remain unknown. The cryptococcal polysaccharide capsule is a leading candidate because of its antiphagocytic properties. Consequently, we asked if the capsule of C. gattii was involved in evasion of DC maturation. We constructed an acapsular strain of C. gattii through CAP59 gene deletion by homologous integration. Encapsulated C. gattii failed to induce human monocyte-derived DC maturation and T cell proliferation, whereas the acapsular mutant induced both processes. Surprisingly, encapsulation impaired DC maturation independent of its effect on phagocytosis. Indeed, DC maturation required extracellular receptor signaling that was dependent on TNF-α and p38 MAPK, but not ERK activation, and the cryptococcal capsule blocked this extracellular recognition. Although the capsule impaired phagocytosis that led to pH-dependent serine-, threonine-, and cysteine-sensitive protease-dependent Ag processing, it was insufficient to impair T cell responses. In summary, C. gattii affects two independent processes, leading to DC maturation and Ag processing. The polysaccharide capsule masked extracellular detection and reduced phagocytosis that was required for DC maturation and Ag processing, respectively. However, the T cell response was fully restored by inducing DC maturation.