Leprosy neuropathy is a chronic degenerative infectious disorder of the peripheral nerve caused by the intracellular obligate pathogen Mycobacterium leprae (M. leprae). Among all nonneuronal cells that constitute the nerve, Schwann cells are remarkable in supporting M. leprae persistence intracellularly. Notably, the success of leprosy infection has been attributed to its ability in inducing the demyelination phenotype after contacting myelinated fibres. However, the exact role M. leprae plays during the ongoing process of myelin breakdown is entirely unknown. Here, we provided evidence showing an unexpected predilection of leprosy pathogen for degenerating myelin ovoids inside Schwann cells. In addition, M. leprae infection accelerated the rate of myelin breakdown and clearance leading to increased formation of lipid droplets, by modulating a set of regulatory genes involved in myelin maintenance, autophagy, and lipid storage. Remarkably, the blockage of myelin breakdown significantly reduced M. leprae content, demonstrating a new unpredictable role of myelin dismantling favouring M. leprae physiology. Collectively, our study provides novel evidence that may explain the demyelination phenotype as an evolutionarily conserved mechanism used by leprosy pathogen to persist longer in the peripheral nerve.