Cyclic AMP synthesized by Mycobacterium tuberculosis has been shown to play a role in pathogenesis. However, the high levels of intracellular cAMP found in both pathogenic and non-pathogenic mycobacteria suggest that additional and important biological processes are regulated by cAMP in these organisms. We describe here the biochemical characterization of novel cAMP-binding proteins in M. smegmatis and M. tuberculosis (MSMEG_5458 and Rv0998, respectively) that contain a cyclic nucleotide binding domain fused to a domain that shows similarity to the GNAT family of acetyltransferases. We detect protein lysine acetylation in mycobacteria and identify a universal stress protein (USP) as a substrate of MSMEG_5458. Acetylation of a lysine residue in USP is regulated by cAMP, and using a strain deleted for MSMEG_5458, we show that USP is indeed an in vivo substrate for MSMEG_5458. The Rv0998 protein shows a strict cAMP-dependent acetylation of USP, despite a lower affinity for cAMP than MSMEG_5458. Thus, this report not only represents the first demonstration of protein lysine acetylation in mycobacteria but also describes a unique functional interplay between a cyclic nucleotide binding domain and a protein acetyltransferase.