In the USA, vancomycin-resistant Enterococcus faecium (VREF) is endemic in hospitals, despite lack of carriage among healthy individuals. In Europe, however, hospital outbreaks are rare, but VREF carriage among healthy individuals and livestock is common. We used amplified fragment-length polymorphism analysis to genotype 120 VREF isolates associated with hospital outbreaks and 45 non-epidemic isolates from the USA, Europe, and Australia. We also looked for the esp virulence gene in these isolates and in 98 VREF from animals. A specific E. faecium subpopulation genetically distinct from non-epidemic VREF isolates was found to be the cause of the hospital epidemics in all three continents. This subpopulation contained a variant of the esp gene that was absent in all non-epidemic and animal isolates. Identification of the variant esp gene will be important in guiding infection-control strategies, and the Esp protein could be a new target for antibacterial therapy.