Mis-incorporation of modified nucleotides, such as 5-methyl-dCTP or 8-oxo-dGTP, in DNA can be detrimental to genomic integrity. MutT proteins are sanitization enzymes which function by hydrolyzing such nucleotides and regulating the pool of free nucleotides in the cytoplasm. Mycobacterial genomes have a set of four MutT homologs, namely, MutT1, MutT2, MutT3 and MutT4. Mycobacterial MutT2 hydrolyzes 5 m-dCTP and 8-oxo-dGTP to their respective monophosphate products. Additionally, it can hydrolyze canonical nucleotides dCTP and CTP, with a suggested role in sustaining their optimal levels in the nucleotide pool. The structures of M. smegmatis MutT2 and its complexes with cytosine derivatives have been determined at resolutions ranging from 1.10 Å to 1.73 Å. The apo enzyme and its complexes with products (dCMP, CMP and 5 m-dCMP) crystallize in space group P21212, while those involving substrates (dCTP, CTP and 5 m-dCTP) crystallize in space group P21. The molecule takes an α/β/α sandwich fold arrangement, as observed in other MutT homologs. The nucleoside moiety of the ligands is similarly located in all the complexes, while the location of the remaining tail exhibits variability. This is the first report of a MutT2-type protein in complex with ligands. A critical interaction involving Asp116 confers the specificity of the enzyme towards cytosine moieties. A conserved set of enzyme-ligand interactions along with concerted movements of important water molecules provide insights into the mechanism of action.