SIV-infected macaques exhibit distinct rates of progression to AIDS and despite significant increases in CD8+ T cells, immune cells fail to control and eradicate SIV in vivo. Here, we investigated the interplay between viral reservoir sites, CD8+ T-cell activation/death and outcome. Our data provide strong evidence that mesenteric (Mes) lymph nodes represent major reservoirs not only for SIV-infected macaques progressing more rapidly toward AIDS but also in controllers. We demonstrate that macaques progressing faster display greater expression of TGF-beta and Indoleamine 2,3 dioxygenase in particular in intestinal tissues associated with a phosphorylation of the p53 protein on serine 15 in CD8+ T cells from Mes lymph nodes. These factors may act as a negative regulator of CD8+ T-cell function by inducing a Bax/Bak/Puma-dependent death pathway of effector/memory CD8+ T cells. Greater T-cell death and viral dissemination was associated with a low level of TIA-1+ expressing cells. Finally, we provide evidence that abrogation of TGF-beta in vitro enhances T-cell proliferation and reduces CD8+ T-cell death. Our data identify a mechanism of T-cell exhaustion in intestinal lymphoid organs and define a potentially effective immunological strategy for the modulation of progression to AIDS.