We describe a case of clinical failure of vancomycin treatment of Staphylococcus aureus infection and the laboratory characteristics of the organism in a tertiary referral university hospital in southern Brazil. An 11-month-old male patient presented with pneumonia and S. aureus was isolated from his respiratory tract. Initial treatment with oxacillin and gentamicin was ineffective. Vancomycin was added to the regimen as the patient worsened, but after the 30th day of vancomycin treatment S. aureus was isolated from the blood. This isolate had a minimum inhibitory concentration (MIC) for vancomycin of 4 g/mL. After pre-incubation with vancomycin the isolate displayed an increase in the expression of vancomycin resistance and colonies grew in the presence of up to 12 g/mL vancomycin. Based on these results, and considering that the patient had not responded to vancomycin, the isolate was considered to be S. aureus heteroresistant to vancomycin (SAHV). The SAHV proved to be similar, based on DNA macrorestriction analysis, to methicillin resistant S. aureus (MRSA) isolates from other patients in the hospital who had responded to vancomycin treatment. Our findings underline the need to improve methods in the clinical laboratory to detect the emergence of S. aureus clinically resistant to vancomycin . The fact that the isolate emerged in the blood 30 days after vancomycin treatment was initiated suggests that the organism was originally an MRSA that had acquired the ability to circumvent the mechanism of action of vancomycin.