Mycobacteria contain a large number of highly divergent species and exhibit unusual lipid metabolism profiles, believed to play important roles in immune invasion. Thioesterases modulate lipid metabolism through the hydrolysis of activated fatty-acyl CoAs; multiple copies are present in mycobacteria, yet many remain uncharacterized. Here, we undertake a comprehensive structural and functional analysis of a TesB thioesterase from Mycobacterium avium (MaTesB). Structural superposition with other TesB thioesterases reveals that the Asp active site residue, highly conserved across a wide range of TesB thioesterases, is mutated to Ala. Consistent with these structural data, the wild-type enzyme failed to hydrolyze an extensive range of acyl-CoA substrates. Mutation of this residue to an active Asp residue restored activity against a range of medium-chain length fatty-acyl CoA substrates. Interestingly, this Ala mutation is highly conserved across a wide range of Mycobacterium species but not found in any other bacteria or organism. Our structural homology analysis revealed that at least one other TesB acyl-CoA thioesterase also contains an Ala residue at the active site, while two other Mycobacterium TesB thioesterases harbor an Asp residue at the active site. The inactive TesBs display a common quaternary structure that is distinct from that of the active TesB thioesterases. Investigation of the effect of expression of either the catalytically active or inactive MaTesB in Mycobacterium smegmatis exposed, to the best of our knowledge, the first genotype-phenotype association implicating a mycobacterial tesB gene. This is the first report that mycobacteria encode active and inactive forms of thioesterases, the latter of which appear to be unique to mycobacteria.