During infection, the host employs nutritional immunity to restrict access to iron. Staphylococcus lugdunensis has been recognized for its ability to utilize host-derived heme to overcome iron restriction. However, the mechanism behind this process involves the release of hemoglobin from erythrocytes, and the hemolytic factors of S. lugdunensis remain poorly understood. S. lugdunensis encodes four phenol-soluble modulins (PSMs), short peptides with hemolytic activity. The peptides SLUSH A, SLUSH B, and SLUSH C are β-type PSMs, and OrfX is an α-type PSM. Our study shows the SLUSH locus to be essential for the hemolytic phenotype of S. lugdunensis. All four peptides individually exhibited hemolytic activity against human and sheep erythrocytes, but synergism with sphingomyelinase was observed exclusively against sheep erythrocytes. Furthermore, our findings demonstrate that SLUSH is crucial for allowing the utilization of erythrocytes as the sole source of nutritional iron and confirm the transcriptional regulation of SLUSH by Agr. Additionally, our study reveals that SLUSH peptides stimulate the human immune system. Our analysis identifies SLUSH as a pivotal hemolytic factor of S. lugdunensis and demonstrates its concerted action with heme acquisition systems to overcome iron limitation in the presence of host erythrocytes.