Staphylococcus aureus is a human commensal and opportunistic pathogen that causes devastating infections in a wide range of locations within the body. One of the defining characteristics of S. aureus is its ability to form clumps in the presence of soluble fibrinogen, which likely has a protective benefit and facilitates adhesion to host tissue. We have previously shown that the ArlRS two-component regulatory system controls clumping, in part by repressing production of the large surface protein Ebh. In this work we show that ArlRS does not directly regulate Ebh, but instead ArlRS activates expression of the global regulator MgrA. Strains lacking mgrA fail to clump in the presence of fibrinogen, and clumping can be restored to an arlRS mutant by overexpressing either arlRS or mgrA, indicating that ArlRS and MgrA constitute a regulatory pathway. We used RNA-seq to show that MgrA represses ebh, as well as seven cell wall-associated proteins (SraP, Spa, FnbB, SasG, SasC, FmtB, and SdrD). EMSA analysis showed that MgrA directly represses expression of ebh and sraP. Clumping can be restored to an mgrA mutant by deleting the genes for Ebh, SraP and SasG, suggesting that increased expression of these proteins blocks clumping by steric hindrance. We show that mgrA mutants are less virulent in a rabbit model of endocarditis, and virulence can be partially restored by deleting the genes for the surface proteins ebh, sraP, and sasG. While mgrA mutants are unable to clump, they are known to have enhanced biofilm capacity. We demonstrate that this increase in biofilm formation is partially due to up-regulation of SasG, a surface protein known to promote intercellular interactions. These results confirm that ArlRS and MgrA constitute a regulatory cascade, and that they control expression of a number of genes important for virulence, including those for eight large surface proteins.