NADH pyrophosphatase (NudC) catalyses the hydrolysis of NAD(H) to AMP and NMN(H) [nicotinamide mononucleotide (reduced form)]. NudC multiple sequence alignment reveals that homologues from most Mycobacterium tuberculosis isolates, but not other mycobacterial species, have a polymorphism at the highly conserved residue 237. To elucidate the functional significance of this polymorphism, comparative analyses were performed using representative NudC isoforms from M. tuberculosis H37Rv (NudCRv) and M. bovis BCG (NudCBCG). Biochemical analysis showed that the P237Q polymorphism prevents dimer formation, and results in a loss of enzymatic activity. Importantly, NudCBCG was found to degrade the active forms of isoniazid (INH), INH-NAD and ethionamide (ETH), ETH-NAD. Consequently, overexpression of NudCBCG in Mycobacterium smegmatis mc2155 and M. bovis BCG resulted in a high level of resistance to both INH and ETH. Further genetic studies showed that deletion of the nudC gene in M. smegmatis mc2155 and M. bovis BCG resulted in increased susceptibility to INH and ETH. Moreover, inactivation of NudC in both strains caused a defect in drug tolerance phenotype for both drugs in exposure assays. Taken together, these data suggest that mycobacterial NudC plays an important role in the inactivation of INH and ETH.