Surface proteins of Staphylococcus aureus are anchored to the cell wall peptidoglycan by a mechanism requiring a C-terminal sorting signal with a LPXTG motif. Sortase cleaves polypeptides between the threonine and the glycine of the LPXTG motif. The carboxyl group of threonine is subsequently amide-linked to the amino group of peptidoglycan cross-bridges. The three-dimensional structure of sortase revealed the close proximity of the catalytic site residue cysteine 184 with histidine 120; however, no structural evidence for a thiolate-imidazolium ion pair could be detected. We report that alanine substitution of either cysteine 184 or histidine 120 abolishes in vivo and in vitro sorting reactions. Further, alanine substitution of tryptophan 194, a residue that is in close proximity of histidine 120, reduces the transpeptidase activity of sortase. These results suggest a model whereby sortase forms a thiolate-imidazolium ion pair for the catalysis of its transpeptidation reaction and that the position of tryptophan 194 assists in the formation of this ion pair.