Mycobacterium tuberculosis (Mtb) virulence is decreased by genetic deletion of the lipoprotein LprG, but the function of LprG remains unclear. We report that LprG expressed in Mtb binds to lipoglycans, such as lipoarabinomannan (LAM), that mediate Mtb immune evasion. Lipoglycan binding to LprG was dependent on both insertion of lipoglycan acyl chains into a hydrophobic pocket on LprG and a novel contribution of lipoglycan polysaccharide components outside of this pocket. An lprG null mutant (Mtb ΔlprG) had lower levels of surface-exposed LAM, revealing a novel role for LprG in determining the distribution of components in the Mtb cell envelope. Furthermore, this mutant failed to inhibit phagosome-lysosome fusion, an immune evasion strategy mediated by LAM. We propose that LprG binding to LAM facilitates its transfer from the plasma membrane into the cell envelope, increasing surface-exposed LAM, enhancing cell envelope integrity, allowing inhibition of phagosome-lysosome fusion and enhancing Mtb survival in macrophages.