We cloned a novel lysophospholipase (CnLYSO1) from Cryptococcus neoformans var. grubii by PCR amplification and a cDNA library screen. The open reading frame (ORF) of 1278 nucleotides coded for a predicted 426-amino-acid protein (CnLyso1p) with two highly conserved GXSXG lipase-specific catalytic motifs and a molecular weight of 48.3 kDa. CnLyso1p exhibited 14% and 21% identity to Arabidopsis thaliana and human lysophospholipases, respectively. Immunoprecipitation and Western blot analyses indicated that CnLyso1p was secreted as a high molecular weight protein of 97-140 kDa. CnLYSO1 expressed in a phospholipase B-null mutant of Saccharomyces cerevisiae demonstrated lysophospholipase and lysophospholipase transacylase activities at pH 4.0. Targeted disruption of CnLYSO1 did not affect growth, melanin or capsule production by C. neoformans. Secreted lysophospholipase and transacylase activities (pH 4.0) were 50% of wild type and CnLyso1p was undetectable on Western blots. Phospholipase B activity was reduced at pH 7.0 (P<0.006) and at pH 4.0 (P=NS). The amount of secreted Plb1p (the gene product of PLB1) was also reduced. Deletion of PLB1 abolished all three secreted activities at pH 4.0 and 7.0. These results are best explained by post-translational interaction, most likely the formation of a functional complex between the independently regulated gene products, CnLyso1p and CnPlb1p.