Since 1999 a lineage of the pathogen Cryptococcus gattii has been infecting humans and other animals in Canada and the Pacific Northwest of the USA. It is now the largest outbreak of a life-threatening fungal infection in a healthy population in recorded history. The high virulence of outbreak strains is closely linked to the ability of the pathogen to undergo rapid mitochondrial tubularisation and proliferation following engulfment by host phagocytes. Most outbreaks spread by geographic expansion across suitable niches, but it is known that genetic re-assortment and hybridisation can also lead to rapid range and host expansion. In the context of C. gattii, however, the likelihood of virulence traits associated with the outbreak lineages spreading to other lineages via genetic exchange is currently unknown. Here we address this question by conducting outgroup crosses between distantly related C. gattii lineages (VGII and VGIII) and ingroup crosses between isolates from the same molecular type (VGII). Systematic phenotypic characterisation shows that virulence traits are transmitted to outgroups infrequently, but readily inherited during ingroup crosses. In addition, we observed higher levels of biparental (as opposed to uniparental) mitochondrial inheritance during VGII ingroup sexual mating in this species and provide evidence for mitochondrial recombination following mating. Taken together, our data suggest that hypervirulence can spread among the C. gattii lineages VGII and VGIII, potentially creating novel hypervirulent genotypes, and that current models of uniparental mitochondrial inheritance in the Cryptococcus genus may not be universal.