Cell elongation occurs primarily at the mycobacterial cell poles, but the molecular mechanisms governing this spatial regulation remain elusive. We recently reported the presence of an intracellular membrane domain (IMD) that was spatially segregated from the conventional plasma membrane in Mycobacterium smegmatis. The IMD is enriched in the polar region of actively elongating cells and houses many essential enzymes involved in envelope biosynthesis, suggesting its role in spatially restricted elongation at the cell poles. Here, we examined reorganization of the IMD when the cells are no longer elongating. To monitor the IMD, we used a previously established reporter strain expressing fluorescent IMD markers and grew it to the stationary growth phase or exposed the cells to nutrient starvation. In both cases, the IMD was delocalized from the cell pole and distributed along the sidewall. Importantly, the IMD could still be isolated biochemically by density gradient fractionation, indicating its maintenance as a membrane domain. Chemical and genetic inhibition of peptidoglycan biosynthesis led to the delocalization of the IMD, suggesting the suppression of peptidoglycan biosynthesis as a trigger of spatial IMD rearrangement. Starved cells with a delocalized IMD can resume growth upon nutrient repletion, and polar enrichment of the IMD coincides with the initiation of cell elongation. These data reveal that the IMD is a membrane domain with the unprecedented capability of subcellular repositioning in response to the physiological conditions of the mycobacterial cell.