We investigated how BAD1, an adhesin and virulence factor of Blastomyces dermatitidis, suppresses phagocyte proinflammatory responses. Wild-type yeast cocultured with murine neutrophils or macrophages prompted release of a soluble factor into conditioned supernatant that abolished TNF-α production in response to the fungus; isogenic, attenuated BAD1 knockout yeast did not have this effect. Phagocytes released 4-to 5-fold more TGF-β in vitro in response to wild-type yeast vs BAD1 knockout yeast. Treatment of inhibitory, conditioned supernatant with anti-TGF-β mAb neutralized detectable TGF-β and restored phagocyte TNF-α production. Similarly, addition of anti-TGF-β mAb into cultures of phagocytes and wild-type yeast reversed BAD1 inhibition of TNF-α production. Conversely, TGF-β treatment of phagocytes cultured with knockout yeast suppressed TNF-α production. Hence, TGF-β mediates BAD1 suppression of TNF-α by wild-type B. dermatitidis cultured in vitro with phagocytes. In contrast to these findings, neutralization of elevated TGF-β levels during experimental pulmonary blastomycosis did not restore BAD1-suppressed TNF-α levels in the lung or ameliorate disease. Soluble BAD1 was found to accumulate in the alveoli of infected mice at levels that suppressed TNF-α production by phagocytes. However, in contrast to yeast cell surface BAD1, which induced TGF-β, soluble BAD1 failed to do so and TNF-α suppression mediated by soluble BAD1 was unaffected by neutralization of TGF-β. Thus, BAD1 of B. dermatitidis induces suppression of TNF-α and progressive infection by both TGF-β-dependent and-independent mechanisms.