T cell exhaustion is a state of T cell dysfunction that arises during many chronic infections and cancer. It is defined by poor effector function, sustained expression of inhibitory receptors and a transcriptional state distinct from that of functional effector or memory T cells. Exhaustion prevents optimal control of infection and tumors. Recently, a clearer picture of the functional and phenotypic profile of exhausted T cells has emerged and T cell exhaustion has been defined in many experimental and clinical settings. Although the pathways involved remain to be fully defined, advances in the molecular delineation of T cell exhaustion are clarifying the underlying causes of this state of differentiation and also suggest promising therapeutic opportunities.