Clinical isolates of Staphylococcus aureus collected from hospitals in Australia were analyzed for genetic similarities using restriction fragment length polymorphisms. Methicillin-resistant (Mcr) isolates from Melbourne (1982) and from Hobart (1986) were closely related to a methicillin-multiresistant S. aureus (MRSA) strain, ANS46, originally isolated in Melbourne in 1982 and studied extensively since. Methicillin-sensitive (Mcs) isolates were isolated concurrently with the Melbourne and Hobart Mcr isolates. These were found to be similar to induced Mcs variants of ANS46; these laboratory variants have lost approximately 40-70 kb of DNA carrying multiple resistance (R) determinants clustered around the mec gene. The Melbourne and Hobart Mcs isolates appear to be natural variants lacking this region of their chromosome. A clinical Mcr and Mcs pair of isolates differing only in the presence of an R-cluster near the mec gene were also isolated in Melbourne in 1990; these are not of the same clonal line as the earlier types from Melbourne and Hobart. These data suggest that insertion or deletion (or both) similar to that produced by known mutagens occurs in the mec region of the chromosome of MRSA in clinical populations under natural selective pressures; such processes may be important in the balance of resistant and sensitive staphylococci in hospitals and other clinical environments.