Children with acute hematogenous osteomyelitis (AHO) have a broad spectrum of illness ranging from mild to severe. The purpose of this study is to evaluate the impact of genomic variation of Staphylococcus aureus on clinical phenotype of affected children and determine which virulence genes correlate with severity of illness.De novo whole genome sequencing was conducted for a strain of Community Acquired Methicillin Resistant Staphylococcus aureus (CA-MRSA), using PacBio Hierarchical Genome Assembly Process (HGAP) from 6 Single Molecule Real Time (SMRT) Cells, as a reference for DNA library assembly of 71 Staphylococcus aureus isolates from children with AHO. Virulence gene annotation was based on exhaustive literature review and genomic data in NCBI for Staphylococcus aureus. Clinical phenotype was assessed using a validated severity score. Kruskal-Wallis rank sum test determined association between clinical severity and virulence gene presence using False Discovery Rate (FDR), significance <0.01.PacBio produced an assembled genome of 2,898,306 bp and 2054 Open Reading Frames (ORFs). Annotation confirmed 201 virulence genes. Statistical analysis of gene presence by clinical severity found 40 genes significantly associated with severity of illness (FDR =0.009). MRSA isolates encoded a significantly greater number of virulence genes than did MSSA (p < 0.0001). Phylogenetic analysis by maximum likelihood (PAML) demonstrated the relatedness of genomic distance to clinical phenotype.The Staphylococcus aureus genome contains virulence genes which are significantly associated with severity of illness in children with osteomyelitis. This study introduces a novel reference strain and detailed annotation of Staphylococcus aureus virulence genes. While this study does not address bacterial gene expression, a platform is created for future transcriptome investigations to elucidate the complex mechanisms involved in childhood osteomyelitis.