A 14-yr-old female Pesquet's parrot (Psittrichas fulgidus) presented for lethargy and decreased ability to fly. Physical exam was unremarkable. Blood work showed an elevated white blood cell count and a strong positive Aspergillus galactomannan titer. Empirical Aspergillus treatment was initiated with compounded generic itraconazole. Radiographs revealed an irregular osteolytic lesion isolated to the distal right humerus. Bone biopsy of the lesion, cytology, and histopathology were diagnostic for osteomyelitis with intralesional yeasts confirmed to be Cryptococcus gattii on fungal culture. After 2 mo of compounded itraconazole treatment, the bird developed dyspnea and dysphagia due to new Cryptococcus lesions in the proximal trachea and glottis. Plasma itraconazole levels were measured and found to be undetectable; therefore, treatment was changed to fluconazole. Twenty-four months after initial presentation, clinical signs improved, but radiographic and histopathology lesions were static. Initial treatment failure was believed to be due to the use of compounded generic itraconazole, which lacks cyclodextrin, a carrier agent used to improve oral absorption, found in commercial itraconazole.