The bacterial second messenger cyclic diguanosine monophosphate (c-di-GMP) plays an important role in a variety of cellular functions, including biofilm formation, alterations in the cell surface, host colonization and regulation of bacterial flagellar motility, which enable bacteria to survive changing environmental conditions. The cellular level of c-di-GMP is regulated by a balance between opposing activities of diguanylate cyclases (DGCs) and cognate phosphodiesterases (PDE-As). Here, we report the presence and importance of a protein, MSDGC-1 (an orthologue of Rv1354c in Mycobacterium tuberculosis), involved in c-di-GMP turnover in Mycobacterium smegmatis. MSDGC-1 is a multidomain protein, having GAF, GGDEF and EAL domains arranged in tandem, and exhibits both c-di-GMP synthesis and degradation activities. Most other proteins containing GGDEF and EAL domains have been demonstrated to have either DGC or PDE-A activity. Unlike other bacteria, which harbour several copies of the protein involved in c-di-GMP turnover, M. smegmatis has a single genomic copy, deletion of which severely affects long-term survival under conditions of nutrient starvation. Overexpression of MSDGC-1 alters the colony morphology and growth profile of M. smegmatis. In order to gain insights into the regulation of the c-di-GMP level, we cloned individual domains and tested their activities. We observed a loss of activity in the separated domains, indicating the importance of full-length MSDGC-1 for controlling bifunctionality.