The synthesis of virulence factors and other extracellular proteins responsible for pathogenicity in Staphylococcus aureus is under the control of the agr locus. A secreted agr-encoded peptide, AgrD, processed from the AgrD gene product, is known to be an effector of self-strain activation and cross-strain inhibition of the agr response. Biochemical analysis of AgrD peptides isolated from culture supernatants has suggested that they contain an unusual thiol ester-linked cyclic structure. In the present work, chemical synthesis is used to confirm that the mature AgrD peptides contain a thiolactone structure and that this feature is absolutely necessary for full biological activity. The AgrD synthetic thiolactone peptides exhibited biological activity in vivo in a mouse protection test. Structure-activity studies have allowed key aspects of the peptide structure involved in the differential activation and inhibition functions to be identified. Accordingly, we propose a model far activation and inhibition of the agr response in which the former, but not the latter, Involves specific acylation of the agr transmembrane receptor, AgrC.