Lipoarabinomannans (LAMs) and phosphatidylinositol mannosides (PIMs) are abundant glycolipids in the cell walls of all corynebacteria and mycobacteria, including the devastating human pathogen Mycobacterium tuberculosis. We have recently shown that M. smegmatis mutants of the lipoprotein-encoding lpqW gene have a profound defect in LAM biosynthesis. When these mutants are cultured in complex medium, spontaneous bypass mutants consistently evolve in which LAM biosynthesis is restored at the expense of polar PIM synthesis. Here we show that restoration of LAM biosynthesis in the lpqW mutant results from secondary mutations in the pimE gene. PimE is a mannosyltransferase involved in converting AcPIM4, a proposed branch point intermediate in the PIM and LAM biosynthetic pathways, to more polar PIMs. Mutations in pimE arose due to insertion of the mobile genetic element ISMsm1 and independent point mutations that were clustered in predicted extracytoplasmic loops of this polytopic membrane protein. Our findings provide the first strong evidence that LpqW is required to channel intermediates such as AcPIM4 into LAM synthesis and that loss of PimE function results in the accumulation of AcPIM4, bypassing the need for LpqW. These data highlight new mechanisms regulating the biosynthetic pathways of these essential cell wall components.