Microorganisms that live in fluctuating environments must constantly adapt their behavior to survive. The host constitutes an important microenvironment in opportunistic and primary fungal pathogens like Cryptococcus neoformans (C. neoformans) and Cryptococcus gattii (C. gattii). In clonal populations, adaptation may be achieved through the generation of diversity. For fungi phenotype switching constitutes a mechanism that allows them to change rapidly. Both C. neoformans and C. gattii undergo phenotypic switching, which allows them to be successful pathogens and cause persistent disease. Similar to other encapsulated microbes that exhibit phenotypic variation, phenotypic switching in Cryptococcus changes the polysaccharide capsule. Most importantly, in animal models phenotypic switching affects virulence and can change the outcome of infection. Virulence changes because C. neoformans and C. gattii switch variants elicit different inflammatory responses in the host. This altered host response can also affect the response to antifungal therapy and in some cases may even promote the selection of switch variants. This review highlights the similarity and differences between phenotypic switching in C. neoformans and C. gattii, the two dominant species that cause cryptococcosis in humans.