Staphylococcus aureus is a versatile, opportunistic human pathogen that can asymptomatically colonize a human host but can also cause a variety of cutaneous and systemic infections. The ability of S. aureus to adapt to such diverse environments is reflected in the presence of complex regulatory networks fine-tuning metabolic and virulence gene expression. One of the most widely distributed mechanisms is the two-component signal transduction system (TCS) which allows a pathogen to alter its gene expression profile in response to environmental stimuli. The simpler TCSs consist of only a transmembrane histidine kinase (HK) and a cytosolic response regulator. S. aureus encodes a total of 16 conserved pairs of TCSs that are involved in diverse signalling cascades ranging from global virulence gene regulation (e.g. quorum sensing by the Agr system), the bacterial response to antimicrobial agents, cell wall metabolism, respiration and nutrient sensing. These regulatory circuits are often interconnected and affect each other's expression, thus fine-tuning staphylococcal gene regulation. This manuscript gives an overview of the current knowledge of staphylococcal environmental sensing by TCS and its influence on virulence gene expression and virulence itself. Understanding bacterial gene regulation by TCS can give major insights into staphylococcal pathogenicity and has important implications for knowledge-based drug design and vaccine formulation.