Systemic fungal infections trigger marked immune-regulatory disturbances, but the mechanisms are poorly understood. We report that the pathogenic yeast of Blastomyces dermatitidis elaborates dipeptidyl-peptidase IVA (DppIVA), a close mimic of the mammalian ectopeptidase CD26, which modulates critical aspects of hematopoiesis. We show that, like the mammalian enzyme, fungal DppIVA cleaved C-C chemokines and GM-CSF. Yeast producing DppIVA crippled the recruitment and differentiation of monocytes and prevented phagocyte activation and ROS production. Silencing fungal DppIVA gene expression curtailed virulence and restored recruitment of CCR2⁺ monocytes, generation of TipDC, and phagocyte killing of yeast. Pharmacological blockade of DppIVA restored leukocyte effector functions and stemmed infection, while addition of recombinant DppIVA to gene-silenced yeast enabled them to evade leukocyte defense. Thus, fungal DppIVA mediates immune-regulatory disturbances that underlie invasive fungal disease. These findings reveal a form of molecular piracy by a broadly conserved aminopeptidase during disease pathogenesis.