Pulmonary cavitation is vital to the persistence and spread of Mycobacterium tuberculosis (MTb), but mechanisms underlying this lung destruction are poorly understood. Fibrillar type I collagen provides the lung’s tensile strength, and only matrix metalloproteinases (MMPs) can degrade it at neutral pH. We investigated MTb-infected lung tissue and found that airway epithelial cells adjacent to tuberculosis (Tb) granulomas expressed a high level of MMP-1 (interstitial collagenase). Conditioned media from MTb-infected monocytes (CoMTb) up-regulated epithelial cell MMP-1 promoter activity, gene expression, and secretion, whereas direct MTb infection did not. CoMTb concurrently suppressed tissue inhibitor of metalloprotease-1 (TIMP-1) secretion, further promoting matrix degradation, and in Tb patients very low TIMP-1 expression was detected. MMP-1 up-regulation required synergy between TNF-α and G protein-coupled receptor signaling pathways. CoMTb stimulated p38 MAPK phosphorylation, and this is the point of TNF-α synergy with G protein-coupled receptor activation. Furthermore, p38 phosphorylation was the switch up-regulating MMP-1 activity and decreasing TIMP-1 secretion. Activated p38 localized to MMP-1-secreting airway epithelial cells in Tb patients. These data reveal a monocyte-epithelial cell network whereby MTb may drive tissue destruction, and they demonstrate that p38 phosphorylation is a key regulatory point in the generation of a matrix-degrading phenotype.