Cryptococcus neoformans is a ubiquitous soil fungus and airborne pathogen that causes over 180,000 deaths each year. Cryptococcus must adapt to host CO levels to cause disease, but the genetic basis for this adaptation is unknown. We utilized quantitative trait loci mapping with 374 progeny from a cross between a CO-tolerant clinical isolate and a CO-sensitive environmental isolate to identify genetic regions regulating CO tolerance. To identify specific quantitative trait genes, we applied fine mapping through bulk segregant analysis of near-isogenic progeny with distinct tolerance levels to CO. We found that virulence among near-isogenic strains in a murine model of cryptococcosis correlated with CO tolerance. Moreover, we discovered that sensitive strains may adapt in vivo to become more CO tolerant and more virulent. These findings highlight the underappreciated role of CO tolerance and its importance in the ability of an opportunistic environmental pathogen to cause disease.