Arcanobacterium haemolyticum, a Gram-positive bacterium, is an under-reportedagent of disease, causing pharyngitis, wound infections and a variety of invasive diseases.This work characterized a known A. haemolyticum toxin, phospholipase D (PLD), anddetermined its possible role in bacterial virulence. In addition, a novel toxin, arcanolysin(ALN), was identified and characterized. A draft genome sequence was determined andseveral additional virulence factors that may aid in disease pathogenesis were identified.PLD was present in all strains of A. haemolyticum tested, and was expressedmaximally during logarithmic growth. Recombinant PLD caused lipid raftrearrangement on the surface of HeLa cells in a dose-dependent manner. Thisrearrangement allowed maximal bacterial adhesion to the host, with a pld knockoutadhering only 39.7% to HeLa cells as compared to wildtype. Loss of production of PLDdid not affect bacterial invasion. However, PLD expressed by intracellular bacteria wascytotoxic to host cells, as determined by 3-(4,5-dimethylthiazol-2-yl)-5-(3-carboxymethoxyphenyl)-2-(4-sulfophenyl)-2H-tetrazolium/phenazine methosulfate(MTS/PMS) viability assays. PLD caused host cell death via necrosis as determined bytransmission electron microscopy. PLD did not induce apoptosis, as caspases 3/7 and 9were not elevated in HeLa cells infected with wildtype A. haemolyticum.A. haemolyticum also expresses a Cholesterol-Dependent Cytolysin (CDC), ALN.Like pld, aln was present in all strains tested. ALN displays a variant undecapeptide andan unusual N-terminal extension not found in most other CDCs. Recombinant ALN11shows significantly increased activity against cultured cells and erythrocytes of humanorigin, compared with intermediate activity on rabbit and hamster cells, and low to noactivity on bovine and ovine cells as measured by hemolysis, cytotoxicity and membranebinding assays. ALN was less inhibited by free cholesterol when compared with otherCDCs, indicating the possibility of alternative receptor binding.The A. haemolyticum genome was sequenced to >20X coverage, and assembled to50 contigs covering ~95% of the genome. The genome is ~1.95Mb with a mol %G+C of53.1% and contained no plasmids. pld and aln have a reduced mol %G+C of 47.2% and46.5%, respectively, indicating the possibility of gene acquisition by horizontal transfer.Initial bioinformatics analysis identified genes encoding a protease, an extracellularDNase, two neuraminidases and three fimbrial biosynthetic operons were also identifiedwithin the genome.