Mycobacterium tuberculosis codes for a HAD-phosphatase, Rv3042c (MtSerB2), that has earlier been characterized as a metabolic enzyme. Here we demonstrate that MtSerB2 is secreted into the cytosol of infected macrophages and is found in bronchoalveolar lavage samples of tuberculosis patients. MtSerB2 induces significant cytoskeleton rearrangements through cofilin activation and affects the expression of genes that regulate actin dynamics. It specifically interacts with HSP90, HSP70 and HSP27 that block apoptotic pathways and not with other HSPs. It actively dephosphorylates MAPK-p38 and NF-kappa B p65 that play crucial roles in inflammatory and immune responses. This in turn leads to down-regulation of Interleukin 8, a chemotactic and inflammatory cytokine. Finally, during evaluation of inhibitors against MtSerB2 we found that Clofazimine, a drug being evaluated for XDR and MDR tuberculosis, inhibits MtSerB2 phosphatase activity and reverses the above effects and interactions with host proteins. Overall, the study identifies that MtSerB2 has new functions that might help the pathogen to evade the host's immune response.