Tuberculosis (TB) remains a major infectious disease worldwide. TB treatment displays a biphasic bacterial clearance, in which the majority of bacteria clear within the first month of treatment, but residual bacteria remain nonresponsive to treatment and eventually may become resistant. Here, we have shown that Mycobacterium tuberculosis was taken up by mesenchymal stem cells (MSCs), where it established dormancy and became highly nonresponsive to isoniazid, a major constituent of directly observed treatment short course (DOTS). Dormant M. tuberculosis induced quiescence in MSCs and promoted their long-term survival. Unlike macrophages, where M. tuberculosis resides in early-phagosomal compartments, in MSCs the majority of bacilli were found in the cytosol, where they promoted rapid lipid synthesis, hiding within lipid droplets. Inhibition of lipid synthesis prevented dormancy and sensitized the organisms to isoniazid. Thus, we have established that M. tuberculosis gains dormancy in MSCs, which serve as a long-term natural reservoir of dormant M. tuberculosis. Interestingly, in the murine model of TB, induction of autophagy eliminated M. tuberculosis from MSCs, and consequently, the addition of rapamycin to an isoniazid treatment regimen successfully attained sterile clearance and prevented disease reactivation.