Staphylococcus aureus is a frequent cause of serious infections and also a human commensal. The emergence of community-associated methicillin-resistant S. aureus led to a dramatic increase in skin and soft tissue infections worldwide. This epidemic has been driven by a limited number of clones, such as USA300 in the United States. To better understand the extent of USA300 evolution and diversification within communities, we performed comparative whole-genome sequencing of three clinical and five colonizing USA300 isolates collected longitudinally from three unrelated households over a 15-month period. Phylogenetic analysis that incorporated additional geographically diverse USA300 isolates indicated that all but one likely arose from a common recent ancestor. Although limited genetic adaptation occurred over the study period, the greatest genetic heterogeneity occurred between isolates from different households and within one heavily colonized household. This diversity allowed for a more accurate tracking of interpersonal USA300 transmission. Sequencing of persisting USA300 isolates revealed mutations in genes involved in major aspects of S. aureus function: adhesion, cell wall biosynthesis, virulence, and carbohydrate metabolism. Genetic variations also included accumulation of multiple polymorphisms within select genes of two multigene operons, suggestive of small genome rearrangements rather than de novo single point mutations. Such rearrangements have been underappreciated in S. aureus and may represent novel means of strain variation. Subtle genetic changes may contribute to USA300 fitness and persistence. Elucidation of small genome rearrangements reveals a potentially new and intriguing mechanism of directed S. aureus genome diversification in environmental niches and during pathogen-host interactions.