Mycobacterium lepraemurium is the causative agent of murine leprosy, a chronic, granulomatous disease similar to human leprosy. Due to the similar clinical manifestations of human and murine leprosy and the difficulty of growing both bacilli axenically, Mycobacterium leprae and M. lepraemurium were once thought to be closely related, although it was later suggested that M. lepraemurium might be related to Mycobacterium avium. In this study, the complete genome of M. lepraemurium was sequenced using a combination of PacBio and Illumina sequencing. Phylogenomic analyses confirmed that M. lepraemurium is a distinct species within the M. avium complex (MAC). The M. lepraemurium genome is 4.05 Mb in length, which is considerably smaller than other MAC genomes, and it comprises 2,682 functional genes and 1,139 pseudogenes, which indicates that M. lepraemurium has undergone genome reduction. An error-prone repair homologue of the DNA polymerase III α-subunit was found to be nonfunctional in M. lepraemurium, which might contribute to pseudogene formation due to the accumulation of mutations in nonessential genes. M. lepraemurium has retained the functionality of several genes thought to influence virulence among members of the MAC.