Cryptococcus neoformans (Cn) is a fungal pathogen responsible for cryptococcal meningitis, which accounts for 15% of AIDS-related deaths. Recent studies have shown that the absence of sterol β-glucosidase (EGCrP2, also known as Sgl1) in Cn significantly attenuates its virulence in a mouse infection model. However, the mechanisms underlying this virulence attenuation remain unclear. In this study, we observed a significant increase in dead cells after 3 days of culture of SGL1-deficient Cn (sgl1Δ, KO) at 37°C, compared with wild-type (WT) and SGL1-reconstituted Cn (sgl1Δ::SGL1, RE). qPCR analysis of WT, KO, and RE strains indicated that autophagy-related genes (ATGs) were significantly downregulated in KO strain. Atg8-dependent GFP translocation to the vacuole was significantly delayed in KO strain under starvation conditions. This autophagy dysfunction was identified as the primary cause of the increased cell death observed in KO strain under nitrogen starvation conditions at 37°C. EGCrP2/Sgl1 is predominantly localized in the vacuoles of Cn, and its deletion results in the accumulation of not only ergosterol β-glucoside (EG), as previously reported, but also acylated EGs (AEGs). AEGs were much more potent than EG in activating the C-type lectin receptor Mincle in mice, rats, and humans. AEGs were released from KO strain via extracellular vesicles (EVs). Chemically synthesized 18:1-EG and EVs derived from KO strain, but not WT or RE strains, enhanced cytokine production in murine and human dendritic cells. AEG-dependent cytokine production was markedly reduced in dendritic cells from Mincle-deficient mice, and the number of KO strain in lung tissue from Mincle-deficient mice was substantially higher than wild-type mice on day 3 after infection. Intranasal administration of acylated sitosterol β-glucoside increased Mincle expression and cytokine production and reduced the Cn burden in lung tissue of Cn-infected mice. These findings suggest that autophagy dysfunction in KO strain and the host innate immune response via the AEG-dependent Mincle activation are critical in reducing Cn virulence in mice.