The Gram-positive pathogen Staphylococcus aureus is a leading cause of global morbidity and mortality. Like many multi-drug-resistant organisms, S. aureus contains antibiotic-modifying enzymes that facilitate resistance to a multitude of antimicrobial compounds. FosB is a Mn(2+)-dependent fosfomycin-inactivating enzyme found in S. aureus that catalyzes nucleophilic addition of either l-cysteine (l-Cys) or bacillithiol (BSH) to the antibiotic, resulting in a modified compound with no bactericidal properties. The three-dimensional X-ray crystal structure of FosB from S. aureus (FosB(Sa)) has been determined to a resolution of 1.15 Å. Cocrystallization of FosB(Sa) with either l-Cys or BSH results in a disulfide bond between the exogenous thiol and the active site Cys9 of the enzyme. An analysis of the structures suggests that a highly conserved loop region of the FosB enzymes must change conformation to bind fosfomycin. While two crystals of FosB(Sa) contain Zn(2+) in the active site, kinetic analyses of FosB(Sa) indicated that the enzyme is inhibited by Zn(2+) for l-Cys transferase activity and only marginally active for BSH transferase activity. Fosfomycin-treated disk diffusion assays involving S. aureus Newman and the USA300 JE2 methicillin-resistant S. aureus demonstrate a marked increase in the sensitivity of the organism to the antibiotic in either the BSH or FosB null strains, indicating that both are required for survival of the organism in the presence of the antibiotic. This work identifies FosB as a primary fosfomycin-modifying pathway of S. aureus and establishes the enzyme as a potential therapeutic target for increased efficacy of fosfomycin against the pathogen.