•Correlation between large-genome vancomycin-resistant E. faecium strains and decreased virulence factors with outbreaks.•Gain/loss of antimicrobial-resistant genes appear to contribute most to rise/decline of an outbreak strain. The first outbreak of vancomycin-resistant Enterococcus faecium (VREfm) in Western Australia was recorded in 2001. A state-wide infection control effort that oversaw patient screening and transfers successfully terminated the outbreak within six months; however, the outbreak re-emerged two years later. Over the two outbreaks, the vanB-positive multilocus sequence type (ST) 173 E. faecium strain was isolated from 201 patients. Our objective was to identify differences in genetic traits leading to successful transmission of ST173 VREfm compared with non-ST173 VREfm isolated during the same period. We also aimed to describe the changes observed in the ST173 VREfm genome collected during the two outbreaks. Virulence factors ecbA, fss3, psaA and scm identified in the non-ST173 isolates were largely absent in the ST173 isolates. The esp gene was not identified beyond 45% coverage for any isolate in this study. In terms of resistance genes, tet(U) was identified in 94.7% of ST173 VREfm isolated in the first outbreak but was largely absent in ST173 VREfm isolated in the second outbreak and in non-ST173 VREfm. Seven ST173 VREfm isolates (Clade A) carried dfrG but not tet(M) resistance genes. The average genome size of ST173 VREfm isolated in the first outbreak was significantly larger than the genome size of ST173 VREfm isolated in the second outbreak. The reduced number of virulence factors in ST173 isolates may explain the low infection and high colonization rates observed during the outbreak. In addition, isolates with larger genomes were found to be associated with outbreaks.