The E3 ubiquitin ligase Cbl-b is a negative regulator of TCR signaling that: 1) sets the activation threshold for T cells; 2) is induced in anergic T cells; and 3) protects against autoimmunity. However, the role of Cbl-b in regulating CD8 T cell activation and functions during physiological T cell responses has not been systematically examined. Using the lymphocytic choriomeningitis virus infection model, we show that Cbl-b deficiency did not significantly affect the clonal expansion of virus-specific CD8 T cells. However, Cbl-b deficiency not only increased the steady-state cell surface expression levels of TCR and CD8 but also reduced Ag-induced down-modulation of cell surface TCR expression by effector CD8 T cells. Diminished Ag-stimulated TCR down-modulation and sustained Ag receptor signaling induced by Cbl-b deficiency markedly augmented IFN-gamma production, which is known to require substantial TCR occupancy. By contrast, Cbl-b deficiency minimally affected cell-mediated cytotoxicity, which requires limited engagement of TCRs. Surprisingly, despite elevated expression of CD8 and reduced Ag-induced TCR down-modulation, the functional avidity of Cbl-b-deficient effector CD8 T cells was comparable to that of wild-type effectors. Collectively, these data not only show that Cbl-b-imposed constraint on TCR signaling has differential effects on various facets of CD8 T cell response but also suggest that Cbl-b might mitigate tissue injury induced by the overproduction of IFN-gamma by CD8 T cells. These findings have implications in the development of therapies to bolster CD8 T cell function during viral infections or suppress T cell-mediated immunopathology.