Anti-tuberculosis (TB) drugs, while being highly potent in vitro, require prolonged treatment to control Mycobacterium tuberculosis (Mtb) infections in vivo. We report here that mesenchymal stem cells (MSCs) shelter Mtb to help tolerate anti-TB drugs. MSCs readily take up Mtb and allow unabated mycobacterial growth despite having a functional innate pathway of phagosome maturation. Unlike macrophage-resident ones, MSC-resident Mtb tolerates anti-TB drugs remarkably well, a phenomenon requiring proteins ABCC1, ABCG2 and vacuolar-type H+ATPases. Additionally, the classic pro-inflammatory cytokines IFNγ and TNFα aid mycobacterial growth within MSCs. Mechanistically, evading drugs and inflammatory cytokines by MSC-resident Mtb is dependent on elevated PGE2 signaling, which we verify in vivo analyzing sorted CD45-Sca1+CD73+-MSCs from lungs of infected mice. Moreover, MSCs are observed in and around human tuberculosis granulomas, harboring Mtb bacilli. We therefore propose, targeting the unique immune-privileged niche, provided by MSCs to Mtb, can have a major impact on tuberculosis prevention and cure.