Staphylococcus aureus regulates the production of extracellular virulence factors using the agr quorum-sensing system. This regulatory system responds to a secreted peptide thiolactone signal called an autoinducing peptide (AIP). The biosynthesis of AIP requires AgrD, the peptide precursor of AIP, and the integral membrane endopeptidase AgrB. In this study, we performed a molecular analysis of AgrD to identify peptide regions important for processing and AIP secretion. As a lead-in to this study, we discovered that AIP type I could be generated in Escherichia coli through the heterologous expression of the agrBD genes, allowing the use of E. coli as an expression host for investigating the biosynthetic pathway. One of the most conserved regions of AgrD is the charged C-terminal tail, and through truncation analysis, the first nine residues were found to be essential for AIP production and AgrB endopeptidase activity. Within this essential region, mutation of residues glutamate 34 or leucine 41 inhibited AIP production and AgrB activity. Following cleavage, AgrB is hypothesized to form an enzyme-bound intermediate with the AgrD N-terminal region, but clear evidence of this intermediate has never been presented. By inactivating the AgrD cysteine 28 residue, an AgrD-AgrB structure was stabilized and detected in immunoblots using N-terminal His6-tagged AgrD. Formation of the structure could not be detected using the AgrB C84S mutation, indicating the cysteine residue is essential for its formation. These studies provide new insights on the requirements and mechanism of S. aureus AIP biosynthesis.