Staphylococcus aureus is the most frequent causative organism of osteomyelitis. It is characterised by widespread bone loss and bone destruction. Previously we demonstrated that S. aureus protein A (SpA) is capable of binding to tumour necrosis factor receptor-1 expressed on pre-osteoblastic cells, which results in signal generation that leads to cell apoptosis resulting in bone loss. In the current report we demonstrate that upon S. aureus binding to osteoblasts it also inhibits de novo bone formation by preventing expression of key markers of osteoblast growth and division such as alkaline phosphatase, collagen type I, osteocalcin, osteopontin and osteocalcin. In addition, S. aureus induces secretion of soluble RANKL from osteoblasts which in turn recruits and activates the bone resorbing cells, osteoclasts. A strain of S. aureus defective in SpA failed to affect osteoblast growth or proliferation and most importantly failed to recruit or activate osteoclasts. These results suggest that S. aureus SpA binding to osteoblasts provides multiple coordinated signals that accounts for bone loss and bone destruction seen in osteomyelitis cases. A better understanding of the mechanisms through which S. aureus leads to bone infection may improve treatment or lead to the development of better therapeutic agents to treat this notoriously difficult disease.