The highly conserved WalK/WalR (aka YycG/YycF) two-component system is specific to low G+C % Gram-positive bacteria. While this system is essential for cell viability, both the nature of its regulon and its physiological role remained mostly uncharacterized. We have recently shown that WalKR positively controls autolytic activity, in particular that of the two major S. aureus autolysins, AtlA and LytM, and identified nine genes belonging to the WalKR regulon that appear to be involved in S. aureus cell wall degradation. Cells lacking WalKR displayed high resistance to Triton X-100-induced lysis and were also more resistant to lysostaphin-induced lysis, suggesting modifications in cell wall structure. Indeed, lowered levels of WalKR led to a significant decrease of peptidoglycan biosynthesis and turnover, and to cell wall modifications which include increased peptidoglycan crosslinking and glycan chain length. Expression of two virulence genes, ebpS and sdrD, involved in interactions between S. aureus and the host matrix was shown to be positively controlled by WalK/WalR. We also demonstrated a direct relationship between WalKR levels within the cell and adherence of the bacteria to inert polystyrene surfaces, i.e. the ability to form biofilms. Taken together, our results now define this signal transduction pathway as a master regulatory system for cell wall metabolism, which we have accordingly renamed WalK/WalR to reflect its true function. New developments in our study of this system, which plays a central role in cell wall metabolism, virulence and biofilm formation, will be presented, including the identification of a gene which can compensate for the essential nature of the system as well as transmission electron micrographs revealing aberrant cell division in the absence of WalKR.