Community Acquired Methicillin Resistant Staphylococcus aureus (CA-MRSA) causes severe necrotizing infections of the skin, soft tissues, and lungs. Staphylococcal alpha-hemolysin is an essential virulence factor in mouse models of CA-MRSA necrotizing pneumonia. S. aureus alpha-hemolysin has long been known to induce inflammatory signaling and cell death in host organisms, however the mechanism underlying these signaling events were not well understood. Using highly purified recombinant alpha-hemolysin, we now demonstrate that alpha-hemolysin activates the Nucleotide-binding domain and leucine-rich repeat containing gene family, pyrin domain containing 3 protein (NLRP3)-inflammasome, a host inflammatory signaling complex involved in responses to pathogens and endogenous danger signals. Non-cytolytic mutant alpha-hemolysin molecules fail to elicit NLRP3-inflammasome signaling, demonstrating that the responses are not due to non-specific activation of this innate immune signaling system by bacterially derived proteins. In monocyte-derived cells from humans and mice, inflammasome assembly in response to alpha-hemolysin results in activation of the cysteine proteinase, caspase-1. We also show that inflammasome activation by alpha-hemolysin works in conjunction with signaling by other CA-MRSA-derived Pathogen Associated Molecular Patterns (PAMPs) to induce secretion of pro-inflammatory cytokines IL-1beta and IL-18. Additionally, alpha-hemolysin induces cell death in these cells through an NLRP3-dependent program of cellular necrosis, resulting in the release of endogenous pro-inflammatory molecules, like the chromatin-associated protein, High-mobility group box 1 (HMGB1). These studies link the activity of a major S. aureus virulence factor to a specific host signaling pathway. The cellular events linked to inflammasome activity have clear relevance to the disease processes associated with CA-MRSA including tissue necrosis and inflammation.