L,D-transpeptidase function predominates in atypical 3 → 3 transpeptide networking of peptidoglycan (PG) layer in Mycobacterium tuberculosis. Prior studies of L,D-transpeptidases have identified only the catalytic site that binds to peptide moiety of the PG substrate or β-lactam antibiotics. This insight was leveraged to develop mechanism of its activity and inhibition by β-lactams. Here, we report identification of an allosteric site at a distance of 21 Å from the catalytic site that binds the sugar moiety of PG substrates (hereafter referred to as the S-pocket). This site also binds a second β-lactam molecule and influences binding at the catalytic site. We provide evidence that two β-lactam molecules bind co-operatively to this enzyme, one non-covalently at the S-pocket and one covalently at the catalytic site. This dual β-lactam-binding phenomenon is previously unknown and is an observation that may offer novel approaches for the structure-based design of new drugs against M. tuberculosis.