Despite intense research, PE_PGRS proteins still represent an intriguing aspect of mycobacterial pathogenesis. These cell surface proteins influence virulence in several pathogenic species, but their diverse and exact functions remain unclear. Herein, we focussed on a PE_PGRS member from Mycobacterium marinum, MMAR_0242, characterized by an extended and unique C-terminal domain. We demonstrate that an M. marinum mutant carrying a transposon insertion in MMAR_0242 is highly impaired in its ability to replicate in macrophages and amoebae, because of its inability to inhibit lysosomal fusion. As a consequence, this mutant failed to survive intracellularly as evidenced by a reduced number of cytosolic actin tail-forming bacteria and by quantitative electron microscopy, which mainly localized MMAR_0242::Tn within membrane-defined vacuoles. Functional complementation studies indicated that the C-terminus, but not the N-terminal PE_PGRS domain, is required for intracellular growth/survival. In line with these findings, disruption of MMAR_0242 resulted in a highly attenuated virulence phenotype in zebrafish embryos, characterized by restricted bacterial loads and a failure to produce granulomas. Furthermore, expression of MMAR_0242 in Mycobacterium smegmatis, a non-pathogenic species naturally deficient in PE_PGRS production, resulted in increased survival in amoebae with enhanced cytotoxic cell death and increased survival in infected mice with splenomegaly. Overall, these results indicate that MMAR_0242 is required for full virulence of M. marinum and sufficient to confer pathogenic properties to M. smegmatis.