Cryptococcus gattii infections in southern California have been reported in patients with HIV/AIDS. In this study, we examined the molecular epidemiology, population structure, and virulence attributes of isolates collected from HIV/AIDS patients in Los Angeles County, California. We show that these isolates consist almost exclusively of VGIII molecular type, in contrast to the VGII molecular type isolates causing the North American Pacific Northwest outbreak. The global VGIII population structure can be divided into two molecular groups, VGIIIa and VGIIIb. Isolates from the Californian patients are virulent in murine and macrophage models of infection, with VGIIIa significantly more virulent than VGIIIb. Several VGIII isolates are highly fertile and produce abundant sexual spores that may serve as infectious propagules. The a and α VGIII MAT locus alleles are largely syntenic with limited rearrangements compared to the known VGI (a/α) and VGII (α) MAT loci, but each has unique characteristics including a distinct deletion flanking the 5' VGIII MATa alleles and the α allele is more heterogeneous than the a allele. Our studies indicate that C. gattii VGIII is endemic in southern California, with other isolates originating from the neighboring regions of Mexico, and in rarer cases from Oregon and Washington state. Given that >1,000,000 cases of cryptococcal infection and >620,000 attributable mortalities occur annually in the context of the global AIDS pandemic, our findings suggest a significant burden of C. gattii may be unrecognized, with potential prognostic and therapeutic implications. These results signify the need to classify pathogenic Cryptococcus cases and highlight possible host differences among the C. gattii molecular types influencing infection of immunocompetent (VGI/VGII) vs. immunocompromised (VGIII/VGIV) hosts.