Mupirocin resistance in Staphylococcus aureus is increasingly being reported in many parts of the world. This study describes the epidemiology and laboratory characterization of mupirocin-resistant methicillin-resistant S. aureus (MRSA) strains in Canadian hospitals. Broth microdilution susceptibility testing of 4,980 MRSA isolates obtained between 1995 and 2004 from 32 Canadian hospitals was done in accordance with CLSI guidelines. The clinical and epidemiologic characteristics of strains with high-level mupirocin resistance (HLMup(r)) were compared with those of mupirocin-susceptible (Mup(s)) strains. MRSA strains were characterized by pulsed-field gel electrophoresis (PFGE) and typing of the staphylococcal chromosomal cassette mec. PCR was done to detect the presence of the mupA gene. For strains with mupA, plasmid DNA was extracted and subjected to Southern blot hybridization. A total of 198 (4.0%) HLMup(r) MRSA isolates were identified. The proportion of MRSA strains with HLMup(r) increased from 1.6% in the first 5 years of surveillance (1995 to 1999) to 7.0% from 2000 to 2004 (P < 0.001). Patients with HLMup(r) MRSA strains were more likely to have been aboriginal (odds ratio [OR], 3.7; 95% confidence interval [CI], 1.5 to 9.4; P = 0.006), to have had community-associated MRSA (OR, 2.2; 95% CI, 1.0 to 5.0; P = 0.05), and to have been colonized with MRSA (OR, 1.7; 95% CI, 1.0 to 3.0; P = 0.04). HLMup(r) MRSA strains were also more likely to be resistant to fusidic acid (21% versus 4% for mupirocin-susceptible strains; P < 0.001). All HLMup(r) MRSA strains had a plasmid-associated mupA gene, most often associated with a 9-kb HindIII fragment. PFGE typing and analysis of the plasmid profiles indicate that both plasmid transmission and the clonal spread of HLMup(r) MRSA have occurred in Canadian hospitals. These results indicate that the incidence of HLMup(r) is increasing among Canadian strains of MRSA and that HLMup(r) MRSA is recovered from patients with distinct clinical and epidemiologic characteristics compared to the characteristics of patents with Mup(s) MRSA strains.