We investigated how BAD1, an adhesin and virulence factor of Blastomyces dermatitidis, suppresses phagocyte proinflammatory responses. Wild-type yeast cocultured with murine neutrophils or macrophages prompted release of a soluble factor into conditioned supernatant that abolished TNF-alpha production in response to the fungus; isogenic, attenuated BAD1 knockout yeast did not have this effect. Phagocytes released 4- to 5-fold more TGF-beta in vitro in response to wild-type yeast vs BAD1 knockout yeast. Treatment of inhibitory, conditioned supernatant with anti-TGF-beta mAb neutralized detectable TGF-beta and restored phagocyte TNF-alpha production. Similarly, addition of anti-TGF-beta mAb into cultures of phagocytes and wild-type yeast reversed BAD1 inhibition of TNF-alpha production. Conversely, TGF-beta treatment of phagocytes cultured with knockout yeast suppressed TNF-alpha production. Hence, TGF-beta mediates BAD1 suppression of TNF-alpha by wild-type B. dermatitidis cultured in vitro with phagocytes. In contrast to these findings, neutralization of elevated TGF-beta levels during experimental pulmonary blastomycosis did not restore BAD1-suppressed TNF-alpha levels in the lung or ameliorate disease. Soluble BAD1 was found to accumulate in the alveoli of infected mice at levels that suppressed TNF-alpha production by phagocytes. However, in contrast to yeast cell surface BAD1, which induced TGF-beta, soluble BAD1 failed to do so and TNF-alpha suppression mediated by soluble BAD1 was unaffected by neutralization of TGF-beta. Thus, BAD1 of B. dermatitidis induces suppression of TNF-alpha and progressive infection by both TGF-beta-dependent and -independent mechanisms.