Cryptococcus neoformans is an encapsulated yeast found ubiquitously in the environment and causes serious infections in immunocompromised populations. Disseminated disease is uncommon and very rarely manifests as peritonitis. We report a case of cryptococcal peritonitis in a HIV positive patient, who presented with distention of abdomen, vomiting, and dyspnoea, where the diagnosis was made on cytological smears of ascitic fluid. The importance of making a quick diagnosis utilizing cytological smears is emphasized and the cytological features are demonstrated. Disseminated cryptococcosis, particularly with peritonitis, is an uncommon manifestation of C. neoformans infection. A high clinical suspicion and early initiation of therapy is needed to recognize and treat patients effectively.