Strains of Staphylococcus aureus, an important human pathogen, display up to 20% variability in their genome sequence, and most sequence information is available for human clinical isolates that have not been subjected to genetic analysis of virulence attributes. S. aureus strain Newman, which was also isolated from a human infection, displays robust virulence properties in animal models of disease and has already been extensively analyzed for its molecular traits of staphylococcal pathogenesis. We report here the complete genome sequence of S. aureus Newman, which carries four integrated prophages, as well as two large pathogenicity islands. In agreement with the view that S. aureus Newman prophages contribute important properties to pathogenesis, fewer virulence factors are found outside of the prophages than for the highly virulent strain MW2. The absence of drug resistance genes reflects the general antibiotic-susceptible phenotype of S. aureus Newman. Phylogenetic analyses reveal clonal relationships between the staphylococcal strains Newman, COL, NCTC8325, and USA300 and a greater evolutionary distance to strains MRSA252, MW2, MSSA476, N315, Mu50, JH1, JH9, and RF122. However, polymorphism analysis of two large pathogenicity islands distributed among these strains shows that the two islands were acquired independently from the evolutionary pathway of the chromosomal backbones of staphylococcal genomes. Prophages and pathogenicity islands play central roles in S. aureus virulence and evolution.