Methicillin-resistant Staphylococcus aureus (MRSA), once restricted to hospitals, is spreading rapidly through the wider community. Resistance to vancomycin, the principal drug used to treat MRSA infections, has only recently emerged, is mainly low level, and characteristically appears during vancomycin therapy (vancomycin-intermediate S. aureus [VISA] and hetero-resistant VISA). This phenomenon suggests the adaptation of MRSA through mutation, although defining the mutations leading to resistance in clinical isolates has been difficult. We studied a vancomycin-susceptible clinical MRSA isolate (MIC of 1 microg/ml) and compared it with an isogenic blood culture isolate from the same patient, despite 42 days of vancomycin treatment (MIC of 4 microg/ml). A whole-genome sequencing approach allowed the nearly complete assembly of the genome sequences of the two isolates and revealed only six nucleotide substitutions in the VISA strain compared with the parent strain. One mutation occurred in graS, encoding a putative two-component regulatory sensor, leading to a change from a polar to a nonpolar amino acid (T136I) in the conserved histidine region of the predicted protein. Replacing the graS allele of the vancomycin-susceptible parent strain with the graS allele from the VISA derivative resulted in increased vancomycin resistance at a level between those of the vancomycin-susceptible S. aureus and VISA clinical isolates, confirming a role for graRS in VISA. Our study suggests that MRSA is able to develop clinically significant vancomycin resistance via a single point mutation, and the two-component regulatory system graRS is a key mediator of this resistance. However, additional mutations are likely required to express the full VISA phenotype.