Increasing drug resistance in pathogens including Mycobacterium tuberculosis (MTB) has been ascribed to mutations in the known target genes. However, many of these drugs have multiple targets; some of which have not been identified so far. Understanding the mechanism of action of these drugs holds a great promise in better management of disease especially by drug-resistant strains. In this study, we report glutamate racemase (MurI), a crucial enzyme of phase I peptidoglycan (PG) biosynthesis pathway of MTB, as an additional target of ethambutol (EMB). The effect on EMB on the MurI protein at structural and functional level was studied using different spectroscopic, biochemical, and insilico approaches. Spectroscopic analysis revealed that EMB-modified protein undergoes conformational alterations. Furthermore, in vitro racemization studies of the MurI protein suggest that EMB decreases its functional activity. Docking studies revealed that EMB interacts with most of the active residues at the binding site and blocks the binding pocket. Overall, data suggests that EMB, a primary drug used for the treatment of tuberculosis (TB), acts as a competitive inhibitor of substrate for binding to mycobacterial MurI protein. The study also points out to our lacunae in understanding the site and mechanism of action of existing drugs. Furthermore, glutamate racemase is a conserved protein of the bacterial kingdom; therefore, ethambutol could be a promising candidate as a broad-spectrum antibiotic for many other bacterial diseases.