There exists decades-old evidence that some mycobacteria, including Mycobacterium avium and Mycobacterium smegmatis, produce hydrazidase, an enzyme that can hydrolyze the first-line antitubercular agent isoniazid. Despite its importance as a potential resistance factor, no studies have attempted to reveal its identity. In this study, we aimed to isolate and identify M. smegmatis hydrazidase, characterize it, and evaluate its impact on isoniazid resistance. We determined the optimal condition under which M. smegmatis produced the highest amount of hydrazidase, purified the enzyme by column chromatography, and identified it by peptide mass fingerprinting. It was revealed to be PzaA, an enzyme known as pyrazinamidase/nicotinamidase whose physiological role remains unknown. The kinetic constants suggested that this amidase with broad substrate specificity prefers amides to hydrazides as a substrate. Notably, of the five tested compounds, including amides, only isoniazid served as an efficient inducer of pzaA transcription, as revealed by quantitative reverse transcription PCR. Moreover, high expression of PzaA was confirmed to be beneficial for the survival and growth of M. smegmatis in the presence of isoniazid. Thus, our findings suggest a possible role for PzaA, and other hydrazidases yet to be identified, as an intrinsic isoniazid resistance factor of mycobacteria.