S. aureus strain 8325-4 was shown to produce alpha-, beta-, delta- and gamma-haemolysins by haemolytic assays and immunoblotting. Hybridization experiments indicated that a single copy of the alpha-haemolysin gene (hla) resides in the chromosome. Site-directed mutagenesis was used to inactivate the hla gene. This gene, which had previously been cloned in E. coli, was inactivated in vitro by inserting a fragment carrying an erythromycin resistance marker. Shuttle plasmids were constructed and transformed into 8325-4 and non-haemolytic recombinants enriched by a plasmid incompatibility technique. A previously isolated Tn551 insertion defective in alpha-haemolysin was not located in hla. It had pleiotropic defects in expression of alpha-, beta- and delta-haemolysins. Expression of alpha-haemolysin from a plasmid-located hla gene was very low. In contrast, hla-erm mutants were deficient only in alpha-haemolysin and allowed high level expression of the plasmid-borne hla gene. The Tn551 insertion is probably located in a gene encoding a positive regulatory element required for expression of several exoproteins. An hla-erm mutant was less virulent than the otherwise isogenic 8325-4 hla+ strain in a mouse peritonitis model, confirming that alpha-haemolysin is an important virulence factor.