The Cfr methyltransferase confers resistance to many 50S ribosomal subunit-targeted antibiotics, including linezolid (LZD), via methylation of the 23S rRNA base A2503 in the peptidyl transferase center. Methicillin-resistant Staphylococcus aureus strain CM05 is the first clinical isolate documented to carry cfr. While cfr is typically plasmid borne, in CM05 it is located on the chromosome and is coexpressed with ermB as part of the mlr operon. Here we evaluated the chromosomal locus, association with mobile genetic elements, and stability of the cfr insertion region in CM05. The cfr-containing mlr operon is located within a 15.5-kb plasmid-like insertion into 23S rRNA allele 4. The region surrounding the cfr gene has a high degree of sequence similarity to the broad-host-range toxin/antitoxin multidrug resistance plasmid pSM19035, including a second ermB gene downstream of the mlr locus and istAS-istBS. Analysis of several individual CM05 colonies revealed two distinct populations for which LZD MICs were either 8 or 2 μg/ml. In the LZD(s) colonies (designated CM05Δ), a recombination event involving the two ermB genes had occurred, resulting in the deletion of cfr and the 3' flanking region (cfr-istAS-istBS-ermB). The fitness advantage of CM05Δ over CM05 (though not likely due to the cfr deletion itself) results in the predominance of CM05Δ in the absence of selective pressure. Minicircles resulting from the ermB recombination event and the novel association of cfr with the pSM19035 plasmid system support the potential for the continued dissemination of cfr.