A recent analysis of group A Streptococcus (GAS) invasive infections in Australia has shown a predominance of M4 GAS, a serotype recently reported to lack the antiphagocytic hyaluronic acid (HA) capsule. Here, we use molecular genetics and bioinformatics techniques to characterize 17 clinical M4 isolates associated with invasive disease in children during this recent epidemiology. All M4 isolates lacked HA capsule, and whole genome sequence analysis of two isolates revealed the complete absence of the hasABC capsule biosynthesis operon. Conversely, M4 isolates possess a functional HA-degrading hyaluronate lyase (HylA) enzyme that is rendered nonfunctional in other GAS through a point mutation. Transformation with a plasmid expressing hasABC restored partial encapsulation in wild-type (WT) M4 GAS, and full encapsulation in an isogenic M4 mutant lacking HylA. However, partial encapsulation reduced binding to human complement regulatory protein C4BP, did not enhance survival in whole human blood, and did not increase virulence of WT M4 GAS in a mouse model of systemic infection. Bioinformatics analysis found no hasABC homologs in closely related species, suggesting that this operon was a recent acquisition. These data showcase a mutually exclusive interaction of HA capsule and active HylA among strains of this leading human pathogen.