DD-Carboxypeptidases (DD-CPases) are low-molecular-mass (LMM) penicillin-binding proteins (PBPs) that are mainly involved in peptidoglycan remodelling, but little is known about the DD-CPases of mycobacteria. In this study, a putative DD-CPase of Mycobacterium smegmatis, MSMEG_2433 is characterized. The gene for the membrane-bound form of MSMEG_2433 was cloned and expressed in Escherichia coli in its active form, as revealed by its ability to bind to the Bocillin-FL (fluorescent penicillin). Interestingly, in vivo expression of MSMEG_2433 could restore the cell shape oddities of the septuple PBP mutant of E. coli, which was a prominent physiological characteristic of DD-CPases. Moreover, expression of MSMEG_2433 in trans elevated beta-lactam resistance in PBP deletion mutants (DdacAdacC) of E. coli, strengthening its physiology as a DD-CPase. To confirm the biochemical reason behind such physiological behaviours, a soluble form of MSMEG_2433 (sMSMEG_2433) was created, expressed and purified. In agreement with the observed physiological phenomena, sMSMEG_2433 exhibited DD-CPase activity against artificial and peptidoglycan-mimetic DD-CPase substrates. To our surprise, enzymic analyses of MSMEG_2433 revealed efficient deacylation for beta-lactam substrates at physiological pH, which is a unique characteristic of beta-lactamases. In addition to the MSMEG_2433 active site that favours DD-CPase activity, in silico analyses also predicted the presence of an omega-loop-like region in MSMEG_2433, which is an important determinant of its beta-lactamase activity. Based on the in vitro, in vivo and in silico studies, we conclude that MSMEG_2433 is a dual enzyme, possessing both DD-CPase and beta-lactamase activities.