Tuberculosis remains a major global health problem that kills up to 2 million people annually. Central to the success of Mycobacterium tuberculosis (Mtb) as a pathogen is its ability to evade host immunity and to establish a chronic infection. Although its primary intracellular niche is within macrophages, the underlying molecular mechanisms are poorly understood. Here we show that Rv2224c, a cell envelope-associated predicted protease, is critical for Mtb virulence. Disruption of Rv2224c led to prolonged survival of infected mice and highly reduced lung pathology. Absence of Rv2224c enhanced host innate immune responses, compromised the intracellular survival of Mtb in macrophages, and increased its susceptibility to lysozyme. We provide insights into the molecular basis for Rv2224c function by showing that Rv2224c activity promotes processing and extracellular release of the Mtb protein, GroEL2. Inhibition of Rv2224c and its targets offers opportunities for therapeutic interventions and immune-modulatory strategies.