Mastitis is an important disease affecting the dairy industry, reducing animals’ health and milk quality, subsequently reducing the income of the farmers. Staphylococcus aureus (S. aureus) is the pathogen that is mainly associated with subclinical mastitis in dairy animal. The treatment of bovine mastitis caused by this pathogen is mainly by administration of antimicrobial agent. However, this practice has become increasingly ineffective, in part, due to the development of antimicrobial resistance (AMR), the ability for the S. aureus to form biofilms and localise inside the host cells, leading to treatment failure. Additionally, increasing number of antimicrobials being banned for dairy farm use further restricts the choice of therapy. Thus, it is important to understand the challenge of this problem, and thus, seek alternative to the existing treatment in order to sustain the animal’s health and ensuring food security. Therefore, the present study aims to determine the prevalence of subclinical mastitis, antimicrobial resistance, biofilm-formation, and intracellular localisation of S. aureus isolated from dairy farms in Kelantan and Pahang, Malaysia. Also, this study aims to investigate the antimicrobial activities of graphene oxide towards biofilm and intracellular S. aureus. Following that, the mechanism of the intracellular antimicrobial activity and the cytotoxicity of the compound towards bovine mammary epithelial cells was determined. A total of 235 milk samples from dairy cows were collected from selected farms in Kelantan and Pahang. The samples were subjected to somatic cell analysis to screen subclinical mastitis, followed by bacteria isolation and antimicrobial susceptibility testing. Isolated S. aureus was further analysed for their ability to form biofilm using biofilm formation assay in a 12 well plate and to invade the bovine mammary epithelial cells (MAC-T cells) using gentamicin protection assay. Moreover, Staphylococcal enterotoxin B (SEB) gene was screened using polymerase chain reaction (PCR). Following that, the antimicrobial activities of GO were tested against extracellular, intracellular, and biofilm form of S. aureus. The mechanism of GO intracellular antimicrobial activities inside MAC-T cells was investigated using endocytosis inhibitor. Finally, the cytotoxicity of GO towards MAC-T cells was evaluated using resazurin assay. The overall total of 74 (31.4%) of milk samples demonstrated >200,000 somatic cells/mL, suggesting the presence of subclinical mastitis in the animals. A total of 39 (16.5%) milk samples harbored S. aureus which demonstrated resistance towards the following antimicrobials; penicillin 18(46%), ampicillin 17(43.6%), oxacillin 12(31%), tetracycline10 (26%), and erythromycin 7(18%). MDR was recorded for a total of 17 (43.5%) of S. aureus isolates. All isolates produced biofilms, where 20% were strong, 67% were moderate and the remaining 13% of isolates were weak biofilm producer. A total of 6 (30%) of selected S. aureus isolates were invasive towards MAC-T cells, as indicated by their ability to evade gentamicin treatment. Following that, graphene oxide was tested and showed to be effective against extracellular and intracellular form S. aureus. GO at 100 g/mL reduced between 30-70% of S. aureus biofilm mass, suggesting GO ability to disrupt the biofilm structure. GO at concentration 200 g/mL was able to kill between 20-80% of intracellular S. aureus, and the mechanism for intracellular antimicrobial activities appeared to be dependent on the actin-polymerisation process, suggesting that GO could be taken up into the MAC-T cells via macropinocytosis process. GO at concentration < 250 g/mL enhanced the MAC-T cells viability, and the toxicity was only profound at concentration higher than 1000 μg/mL, which is higher than the concentration needed to kill intracellular S. aureus in the host cells. This study highlighted prevalence of subclinical mastitis that requires intervention strategy to ensure animal health is maintained. Also, the ability of isolated S. aureus to form biofilms and invade the host cells provided additional challenges for the treatment of the diseases. GO has demonstrated a promising antimicrobial activity against intracellular S. aureus mediated by the macropinocytosis process and tolerated by the bovine mammary epithelial cells. This finding showed that the GO has the potential to be further tested and developed as an alternative therapy for bovine mastitis.