The glycopeptide antibiotic vancomycin is considered indispensable for the treatment of multidrug-resistant Staphylococcus aureus infections, and so the acquisition by these organisms of transmissible glycopeptide resistance elements from enterococci had been anticipated with apprehension. It was therefore a considerable surprise when vancomycin-intermediate S. aureus (VISA) clinical isolates were reported in 1997, with a novel, borderline-resistance phenotype acquired without genetic exchange. Clinical vancomycin-resistant S. aureus (VRSA) were not reported until 2002, expressing high level, transmissible resistance by virtue of vanA resistance determinants within enterococcal transposable elements residing on staphylococcal plasmids. This review will provide an update on the frustratingly variable characteristics of the VISA phenotype, focus on the progress made in understanding the molecular basis of the VISA resistance mechanism from the viewpoint of genetic regulation and cell wall stress response, and summarize the information currently available on VRSA. Finally, alternatives to vancomycin that are already available or nearing approval will be briefly reviewed, with attention to their limitations and potential for resistance development.