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Mycobacterial species, like other microbes, spontaneously form multicellular drug-tolerant biofilms when grown in vitro in detergent-free liquid media. The structure of Mycobacterium tuberculosis biofilms is formed through genetically programmed pathways and is built upon a large abundance of novel extracellular free mycolic acids (FM), although the mechanism of FM synthesis remained unclear. Here we show that the FM in Mycobacterium smegmatis biofilms is produced through the enzymatic release from constitutively present mycolyl derivatives. One of the precursors for FM is newly synthesized trehalose dimycolate (TDM), which is cleaved by a novel TDM-specific serine esterase, Msmeg_1529. Disruption of Msmeg_1529 leads to undetectable hydrolytic activity, reduced levels of FM in the mutant, and retarded biofilm growth. Furthermore, enzymatic hydrolysis of TDM remains conserved in M. tuberculosis, suggesting the presence of a TDM-specific esterase in this pathogen. Overall, this study provides the first evidence for an enzymatic release of free mycolic acids from cell envelope mycolates during mycobacterial growth. [ABSTRACT FROM AUTHOR]