The mycobacterial cell wall is a dynamic structure that protects Mycobacterium tuberculosis and its relatives from environmental stresses. Modulation of cell wall metabolism under stress is thought to be responsible for decreased cell wall permeability and increased tolerance to antibiotics. The signaling pathways that control cell wall metabolism under stress, however, are poorly understood. Here, we examine the signaling capacity of a cell wall master regulator, the Serine Threonine Phosphatase PstP, in the model organism Mycobacterium smegmatis. We studied how interference with a regulatory phosphorylation site on PstP affects growth, cell wall metabolism and antibiotic tolerance. We find that a phospho-mimetic mutation, pstP T171E, slows growth, misregulates both mycolic acid and peptidoglycan metabolism in different conditions, and interferes with antibiotic tolerance. These data suggest that phosphorylation on PstP controls its substrate specificity and is important in the transition between growth and stasis.