Staphylococcus aureus is a remarkably adaptable organism capable of multiple modes of growth in the human host, as a part of the normal flora, as a pathogen, or as a biofilm. Many of the regulatory pathways governing these modes of growth are centered on the activities of two regulatory molecules, the DNA binding protein SarA and the regulatory RNAIII effector molecule of the agr system. Here, we describe the modulation of these regulators and their downstream target genes by SarZ, a member of the SarA/MarR family of transcriptional regulators. Transcriptional and phenotypic analyses of a sarZ mutant demonstrated that the decreased transcription of mgrA and the agr RNAIII molecule was accompanied by increased transcription of spa (protein A) and downregulation of hla (alpha-hemolysin) and sspA (V8 protease) transcripts when compared to its isogenic parent. The decrease in protease activity was also associated with an increase in SarA expression. Consistent with an increase in SarA levels, the sarZ mutant displayed an enhanced ability to form biofilms. Together, our results indicate that SarZ may be an important regulator governing the dissemination phase of S. aureus infections, as it promotes toxin expression while repressing factors required for biofilm formation.