Cystic fibrosis (CF) lung disease is associated with diverse bacteria chronically infecting the airways. Slow-growing, antibiotic-resistant mutants of Staphylococcus aureus known as small-colony variants (SCVs) have been isolated from respiratory secretions from European adults and children with CF lung disease using specific but infrequently used culture techniques. Staphylococcus aureus SCVs can be selected either by exposure to specific antibiotics or by growth with another CF pathogen, Pseudomonas aeruginosa. We sought to determine the prevalence, clinical significance, and likely mechanisms of selection of S. aureus SCVs among a US cohort of children with CF. We performed a 2-year study of 100 children with CF using culture techniques sensitive for S. aureus SCVs, and evaluated associations with clinical characteristics using multivariable regression models. Staphylococcus aureus SCV infection was detected among 24% of participants and was significantly associated with a greater drop in lung function during the study (P = .007, adjusted for age and lung function at enrollment). This association persisted after adjusting for infection with other known CF pathogens, including P. aeruginosa and methicillin-resistant S. aureus. Evidence indicated that S. aureus SCVs were likely selected in vivo by treatment with the antibiotic trimethoprim-sulfamethoxazole and possibly by coinfection with P. aeruginosa. Infection with SCV S. aureus was independently associated with worse CF respiratory outcomes in this pediatric cohort. As many clinical microbiology laboratories do not specifically detect S. aureus SCVs, validation and extension of these findings would require widespread changes in the usual laboratory and clinical approaches to these bacteria.