In chronic infections and cancer, T cells are exposed to persistent antigen and/or inflammatory signals. This scenario is often associated with the deterioration of T cell function: a state called 'exhaustion'. Exhausted T cells lose robust effector functions, express multiple inhibitory receptors and are defined by an altered transcriptional programme. T cell exhaustion is often associated with inefficient control of persisting infections and tumours, but revitalization of exhausted T cells can reinvigorate immunity. Here, we review recent advances that provide a clearer molecular understanding of T cell exhaustion and reveal new therapeutic targets for persisting infections and cancer.