Abstract Background Monitoring drug resistance in Mycobacterium tuberculosis is essential to curb the spread of tuberculosis (TB). Unfortunately, drug susceptibility testing is currently not available in Papua New Guinea (PNG) and that impairs TB control in this country. We report for the first time M. tuberculosis mutations associated with resistance to first and second-line anti-TB drugs in Madang, PNG. A molecular cluster analysis was performed to identify M. tuberculosis transmission in that region. Results Phenotypic drug susceptibility tests showed 15.7% resistance to at least one drug and 5.2% multidrug resistant (MDR) TB. Rifampicin resistant strains had the rpoB mutations D516F, D516Y or S531L; Isoniazid resistant strains had the mutations katG S315T or inhA promoter C15T; Streptomycin resistant strains had the mutations rpsL K43R, K88Q, K88R), rrs A514C or gidB V77G. The molecular cluster analysis indicated evidence for transmission of resistant strain. Conclusions We observed a substantial rate of MDR-TB in the Madang area of PNG associated with mutations in specific genes. A close monitoring of drug resistance is therefore urgently required, particularly in the presence of drug-resistant M. tuberculosis transmission. In the absence of phenotypic drug susceptibility testing in PNG, molecular assays for drug resistance monitoring would be of advantage.