Interferon stimulated gene 15 (ISG15) deficiency in humans leads to severe interferonopathies and mycobacterial disease, the latter being previously attributed to its extracellular cytokine-like activity. Here, we demonstrate a novel role for secreted ISG15 as an IL-10 inducer, unique to primary human monocytes. Employing ex vivo systems analysis of human transcriptome datasets, we observed a significant correlation of ISG15-induced monocyte IL-10 and lymphocyte IFNγ expression. This effect was associated with p38 MAPK and PI3K signalling in healthy volunteers. The specificity and MAPK/PI3K-dependence of ISG15-induced monocyte IL-10 production was confirmed in vitro using CRISPR/Cas9 knockout and pharmacological inhibitors. Moreover, this ISG15/IL10 axis was amplified in leprosy but disrupted in human active tuberculosis (TB) patients. Importantly, ISG15 strongly correlated with inflammation and disease severity during active TB. In conclusion, this study identifies a novel anti-inflammatory ISG15/IL-10 myeloid axis that is disrupted in active TB, revealing a potential biomarker for disease severity in this major human disease.