The innate immune system is the primary defence against the versatile pathogen, Staphylococcus aureus. How this organism is able to avoid immune killing and cause infections is poorly understood. Using an established larval zebrafish infection model, we have shown that overwhelming infection is due to subversion of phagocytes by staphylococci, allowing bacteria to evade killing and found foci of disease. Larval zebrafish coinfected with two S. aureus strains carrying different fluorescent reporter gene fusions (but otherwise isogenic) had bacterial lesions, at the time of host death, containing predominantly one strain. Quantitative data using two marked strains revealed that the strain ratios, during overwhelming infection, were often skewed towards the extremes, with one strain predominating. Infection with passaged bacterial clones revealed the phenomenon not to be due to adventitious mutations acquired by the pathogen. After infection of the host, all bacteria are internalized by phagocytes and the skewing of population ratios is absolutely dependent on the presence of phagocytes. Mathematical modelling of pathogen population dynamics revealed the data patterns are consistent with the hypothesis that a small number of infected phagocytes serve as an intracellular reservoir for S. aureus, which upon release leads to disseminated infection. Strategies to specifically alter neutrophil/macrophage numbers were used to map the potential subpopulation of phagocytes acting as a pathogen reservoir, revealing neutrophils as the likely ‘niche’. Subsequently in a murine sepsis model, S. aureus abscesses in kidneys were also found to be predominantly clonal, therefore likely founded by an individual cell, suggesting a potential mechanism analogous to the zebrafish model with few protected niches. These findings add credence to the argument that S. aureus control regimes should recognize both the intracellular as well as extracellular facets of the S. aureus life cycle.