T cell exhaustion has a major role in failure to control chronic infection. High expression of inhibitory receptors, including PD-1, and the inability to sustain functional T cell responses contribute to exhaustion. However, the transcriptional control of these processes remains unclear. Here we demonstrate that the transcription factor T-bet regulated the exhaustion of CD8+ T cells and the expression of inhibitory receptors. T-bet directly repressed transcription of the gene encoding PD-1 and resulted in lower expression of other inhibitory receptors. Although a greater abundance of T-bet promoted terminal differentiation after acute infection, high T-bet expression sustained exhausted CD8+ T cells and repressed the expression of inhibitory receptors during chronic viral infection. Persistent antigenic stimulation caused downregulation of T-bet, which resulted in more severe exhaustion of CD8+ T cells. Our observations suggest therapeutic opportunities involving higher T-bet expression during chronic infection. © 2011 Nature America, Inc. All rights reserved.