Sepsis caused by Gram-positive bacterial pathogens is a major fatal disease but its molecular basis remains elusive. Toll-like receptor 2 (TLR2) has been implicated in the orchestration of inflammation and sepsis but its role appears to vary for different pathogen species and clones. Accordingly, Staphylococcus aureus clinical isolates differ substantially in their capacity to activate TLR2. Here we show that strong TLR2 stimulation depends on high-level production of phenol-soluble modulin (PSM) peptides in response to the global virulence activator Agr. PSMs are required for mobilizing lipoproteins, the TLR2 agonists, from the staphylococcal cytoplasmic membrane. Notably, the course of sepsis caused by PSM-deficient S. aureus is similar in wild-type and TLR2-deficient mice, but TLR2 is required for protection of mice against PSM-producing S. aureus. Thus, a crucial role of TLR2 depends on agonist release by bacterial surfactants. Modulation of this process may lead to new therapeutic strategies against Gram-positive infections.