Staphylococcus aureus is a major human and veterinary pathogen worldwide. Methicillin-resistant S. aureus (MRSA) poses a significant and enduring problem to the treatment of infection by such strains. Resistance is usually conferred by the acquisition of a nonnative gene encoding a penicillin-binding protein (PBP2a), with significantly lower affinity for β-lactams. This resistance allows cell-wall biosynthesis, the target of β-lactams, to continue even in the presence of typically inhibitory concentrations of antibiotic. PBP2a is encoded by the mecA gene, which is carried on a distinct mobile genetic element (SCCmec), the expression of which is controlled through a proteolytic signal transduction pathway comprising a sensor protein (MecR1) and a repressor (MecI). Many of the molecular and biochemical mechanisms underlying methicillin resistance in S. aureus have been elucidated, including regulatory events and the structure of key proteins. Here we review recent advances in this area.