In 1999, the population of Vancouver Island, Canada, began to experience an outbreak of a fatal fungal disease caused by a highly virulent lineage of Cryptococcus gattii. This organism has recently spread to the Canadian mainland and Pacific Northwest, but the molecular cause of the outbreak remains unknown. Here we show that the Vancouver Island outbreak (VIO) isolates have dramatically increased their ability to replicate within macrophages of the mammalian immune system in comparison with other C. gattii strains. We further demonstrate that such enhanced intracellular parasitism is directly linked to virulence in a murine model of cryptococcosis, suggesting that this phenotype may be the cause of the outbreak. Finally, microarray studies on 24 C. gattii strains reveals that the hypervirulence of the VIO isolates is characterized by the up-regulation of a large group of genes, many of which are encoded by mitochondrial genome or associated with mitochondrial activities. This expression profile correlates with an unusual mitochondrial morphology exhibited by the VIO strains after phagocytosis. Our data thus demonstrate that the intracellular parasitism of macrophages is a key driver of a human disease outbreak, a finding that has significant implications for a wide range of other human pathogens.