The alarming rise in multidrug-resistant (MDR) and extremely drug-resistant (XDR) tuberculosis has increased the demand for effective alternative approaches to tackling the increasing pathogenic graph. Features such as host specificity, multiplicity at the site of infection and effectiveness against drug resistant bacterial strains renewed interest in phage-based therapeutics. D29 mycobacteriophage, capable of efficiently infecting and killing Mycobacterium tuberculosis, projects itself as a potential therapeutic candidate against tuberculosis. The ability of D29 phage to lyse mycobacterial cells is endowed by specific phage-encoded lysin proteins. To overcome mycobacterial cell envelope barriers, D29 phage encodes two functionally distinct enzymes, namely lysin A (LysA) and lysin B (LysB), which ensures the breakdown of peptidoglycan and the outer mycolylarabinogalactan layer, respectively. The ability to break down the mycobacterial peptidoglycan layer projects LysA as a potential therapeutic candidate. However, the regulatory mechanism of LysA during the phage lytic cycle still remains ill-defined. Molecular dissection of LysA suggested it to be a multidomain molecule consisting of two catalytic domains, namely an N-terminal domain (NTD) and lysozyme-like domain (LD), and a C-terminal cell wall binding domain (CTD). Here we show that during D29 lytic cycle, structural and functional regulation of LysA not only orchestrates host cell lysis but is also critical for maintaining phage-host population dynamics by governing various phases of the lytic cycle. We report that LysA exists in two conformations, of which only one is active, and the protein undergoes a CTD-mediated host peptidoglycan-dependent conformational switch to become active for carrying out endogenous host cell lysis. Interestingly, D29 maintains a pool of inactive LysA, allowing complete assembly of phage progeny, thus helping avoid premature host lysis. Additionally, and importantly, we show that the switch reverses post-lysis, thus preventing exogenous targeting of bystanders, which otherwise negatively affects phage propagation in the environment. However, LysA^ΔCTD fails to inhibit exogenous targeting of host cells due to the absence of the structural regulation. We believe that LysA devoid of CTD can be used to target mycobacterial cells for therapeutic purposes. Thus a deep structural and functional insight into the regulatory mechanism of LysA will allow us to develop various efficient phage-based therapeutics to target mycobacterial infection.