EmbR, a putative transcriptional regulator from Mycobacterium tuberculosis, is homologous to the OmpR class of transcriptional regulators that possess winged helix-turn-helix DNA binding motifs. In contrast to other OmpR-like response regulators that are usually phosphorylated and controlled by histidine kinases, EmbR was recently shown to be phosphorylated by the cognate mycobacterial serine/threonine kinase PknH. Despite the in vitro evidence of phosphorylation and interaction between the kinase and regulator, the physiological function of the PknH-EmbR pair is still unknown. We identify the embCAB operon encoding arabinosyltransferases in M. tuberculosis as the cellular target of EmbR. Phosphorylation of EmbR enhances its DNA binding activity towards promoter regions of embCAB genes. In vivo studies involving expression of PknH in Mycobacterium smegmatis established its positive regulatory effect on transcription of the embCAB operon via phosphorylation of EmbR. Interestingly, increased transcription of embC, catalyzing arabinosylation of lipomannan (LM) to lipoarabinomannan (LAM), results in a high LAM/LM ratio, which in turn is a crucial factor in mycobacterial virulence. The PknH-mediated increase in the transcription of embAB genes significantly alters resistance to ethambutol, a frontline antituberculosis drug known to target embAB genes. These findings and in vivo upregulation of PknH inside the host macrophages suggest a functionally relevant signaling mechanism involving the PknH-EmbR-embCAB system.