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The type VII protein secretion system (T7SS) plays a critical role in the virulence of human pathogens including Mycobacterium tuberculosis and Staphylococcus aureus. Here we report that the S. aureus T7SS secretes a large nuclease toxin, EsaD. The toxic activity of EsaD is neutralised during its biosynthesis through complex formation with an antitoxin, EsaG, which binds to its C-terminal nuclease domain. The secretion of EsaD is dependent upon a further accessory protein, EsaE, that does not interact with the nuclease domain, but instead binds to the EsaD N-terminal region. EsaE has a dual cytoplasmic/membrane localization and membrane-bound EsaE interacts with the T7SS secretion ATPase, EssC, implicating EsaE in targeting the EsaDG complex to the secretion apparatus. EsaD and EsaE are co-secreted whereas EsaG is found only in the cytoplasm and may be stripped off during the secretion process. Strain variants of S. aureus that lack esaD encode at least two copies of EsaG-like proteins most likely to protect themselves from the toxic activity of EsaD secreted by esaD+ strains. In support of this, a strain overproducing EsaD elicits significant growth inhibition against a sensitive strain. We conclude that T7SSs may play unexpected and key roles in bacterial competitiveness.