Due to the occurrence of antibiotic resistance, bacterial infectious diseases have become a serious threat to public health. To overcome antibiotic resistance, novel antibiotics are urgently needed. N-thiadiazole-4-hydroxy-2-quinolone-3-carboxamides are a potential new class of antibacterial agents, as one of its derivatives was identified as an antibacterial agent against S. aureus. However, no potency-directed structural optimization has been performed. In this study, we designed and synthesized 37 derivatives, and evaluated their antibacterial activity against S. aureus ATCC29213, which led to the identification of ten potent antibacterial agents with minimum inhibitory concentration (MIC) values below 1 μg/mL. Next, we performed bacterial growth inhibition assays against a panel of drug-resistant clinical isolates, including methicillin-resistant S. aureus, and cytotoxicity assays with HepG2 and HUVEC cells. One of the tested compounds named 1-ethyl-4-hydroxy-2-oxo-N-(5-(thiazol-2-yl)-1,3,4-thiadiazol-2-yl)-1,2-dihydroquinoline-3-carboxamide (g37) showed 2 to 128-times improvement compared with vancomycin in term of antibacterial potency against the tested strains (MICs: 0.25-1 μg/mL vs. 1-64 μg/mL) and an optimal selective toxicity (HepG2/MRSA, 110.6 to 221.2; HUVEC/MRSA, 77.6-155.2). Further, comprehensive evaluation indicated that g37 did not induce resistance development of MRSA over 20 passages, and it has been confirmed as a bactericidal, metabolically stable, orally active antibacterial agent. More importantly, we have identified the S. aureus DNA gyrase B as its potential target and proposed a potential binding mode by molecular docking. Taken together, the present work reports the most potent derivative of this chemical series (g37) and uncovers its potential target, which lays a solid foundation for further lead optimization facilitated by the structure-based drug design technique.