The Listeria monocytogenes Agr peptide-sensing system has been analysed by creating a deletion mutant in agrD, the structural gene for the putative quorum-sensing peptide. The DeltaagrD mutant displayed significantly reduced biofilm formation, a defect which could be restored by genetic or physical complementation. A reduced invasion of Caco-2 intestinal epithelial cells was observed for the DeltaagrD mutant while phagocytosis by THP-1 macrophages was unaffected. Additionally, the level of internalin A (InlA) in the cell wall was decreased in the DeltaagrD mutant. Expression profiling of virulence genes (hlyA, actA, plcA, prfA and inlA) identified a finely tuned regulation which resulted in an impaired virulence response in the DeltaagrD mutant. The mutant is also significantly attenuated for virulence in mice, as revealed by bioluminescent in vivo imaging. On day 3 post infection, systemic dissemination to livers and spleens had occurred for the wild type, whereas the DeltaagrD mutant remained localized to the liver. Microarray analysis identified 126 and 670 genes as significantly regulated in exponential and stationary phase respectively. The results presented here suggest that peptide sensing plays an important role in the biology of L. monocytogenes, with relevant phenotypes in both the saprophytic and parasitic lifecycles.