Commensal bacteria are known to inhibit pathogen colonization; however, complex host-microbe and microbe-microbe interactions have made it difficult to gain a detailed understanding of the mechanisms involved in the inhibition of colonization. Here we show that the serine protease Esp secreted by a subset of Staphylococcus epidermidis, a commensal bacterium, inhibits biofilm formation and nasal colonization by Staphylococcus aureus, a human pathogen. Epidemiological studies have demonstrated that the presence of Esp-secreting S. epidermidis in the nasal cavities of human volunteers correlates with the absence of S. aureus. Purified Esp inhibits biofilm formation and destroys pre-existing S. aureus biofilms. Furthermore, Esp enhances the susceptibility of S. aureus in biofilms to immune system components. In vivo studies have shown that Esp-secreting S. epidermidis eliminates S. aureus nasal colonization. These findings indicate that Esp hinders S. aureus colonization in vivo through a novel mechanism of bacterial interference, which could lead to the development of novel therapeutics to prevent S. aureus colonization and infection.