Some bacterial pathogens elaborate and secrete virulence factors in response to environmental signals, others in response to a specific host product, and still others in response to no discernible cue. In this study, we have demonstrated that the synthesis of Staphylococcus aureus virulence factors is controlled by a density-sensing system that utilizes an octapeptide produced by the organism itself. The octapeptide activates expression of the agr locus, a global regulator of the virulence response. This response involves the reciprocal regulation of genes encoding surface proteins and those encoding secreted virulence factors. As cells enter the postexponential phase, surface protein genes are repressed by agr and secretory protein genes are subsequently activated. The intracellular agr effector is a regulatory RNA, RNAIII, whose transcription is activated by an agr-encoded signal transduction system for which the octapeptide is the ligand.