Osteomyelitis is a common manifestation of invasive Staphylococcus aureus infection. Pathogen-induced bone destruction limits antimicrobial penetration to the infectious focus and compromises treatment of osteomyelitis. To investigate mechanisms of S. aureus-induced bone destruction, we developed a murine model of osteomyelitis. Microcomputed tomography of infected femurs revealed that S. aureus triggers profound alterations in bone turnover. The bacterial regulatory locus sae was found to be critical for osteomyelitis pathogenesis, as Sae-regulated factors promote pathologic bone remodeling and intraosseous bacterial survival. Exoproteome analyses revealed the Sae-regulated protease aureolysin as a major determinant of the S. aureus secretome and identified the phenol-soluble modulins as aureolysin-degraded, osteolytic peptides that trigger osteoblast cell death and bone destruction. These studies establish a murine model for pathogen-induced bone remodeling, define Sae as critical for osteomyelitis pathogenesis, and identify protease-dependent exoproteome remodeling as a major determinant of the staphylococcal virulence repertoire. •S. aureus triggers profound alterations in bone remodeling during osteomyelitis•The bacterial sae regulatory locus is critical to the pathogenesis of osteomyelitis•Aureolysin, a Sae-regulated secreted protease, modifies the S. aureus virulence repertoire•Aureolysin-degraded osteolytic peptides trigger osteoblast cell death and bone destruction