The bacterial pathogen Staphylococcus aureus is responsible for a significant amount of human morbidity and mortality, and the ability of S. aureus to cause disease is absolutely dependent on the acquisition of iron from the host. The most abundant iron source to invading staphylococci is in the form of the porphyrin heme. S. aureus is capable of acquiring nutrient iron from heme and hemoproteins via two heme-acquisition systems, the iron-regulated surface determinant system (Isd) and the heme transport system (Hts). Heme acquisition through these systems is involved in staphylococcal pathogenesis suggesting that the intracellular fate of heme plays a significant role in the infectious process. The valuable heme molecule presents a paradox to invading bacteria because although heme is an abundant source of nutrient iron, the extreme reactivity of heme makes it toxic at high concentrations. Therefore, bacteria must regulate the levels of intracellular heme to avoid toxicity. Although the molecular mechanisms responsible for staphylococcal heme acquisition are beginning to emerge, the mechanisms by which S. aureus regulate intracellular heme homeostasis are largely unknown. In this review we describe three potential fates of host-derived heme acquired by S. aureus during infection: (i) degradation for use as a nutrient iron source, (ii) incorporation into bacterial heme-binding proteins for use as an enzyme cofactor, or (iii) efflux through a dedicated ABC-type transport system. We hypothesize that the ultimate fate of exogenously acquired heme in S. aureus is dependent upon the intracellular and extracellular availability of both iron and heme.