During chronic viral infections and in cancer, T cells become dysfunctional, a state known as T cell exhaustion. Although it is well recognized that memory CD8 T cells account for the persistence of CD8 T cell immunity after acute infection, how exhausted T cells persist remains less clear. Using chronic infection with lymphocytic choriomeningitis virus clone 13 and tumor samples, we demonstrate that CD8 T cells differentiate into a less exhausted TCF1^high and a more exhausted TCF1^low population. Virus-specific TCF1^high CD8 T cells, which resemble T follicular helper (T_FH) cells, persist and recall better than do TCF1^low cells and act as progenitor cells to replenish TCF1^low cells. We show that TCF1 is both necessary and sufficient to support this progenitor-like CD8 subset, whereas cell-intrinsic type I interferon signaling suppresses their differentiation. Accordingly, cell-intrinsic TCF1 deficiency led to a loss of these progenitor CD8 T cells, sharp contraction of virus-specific T cells, and uncontrolled viremia. Mechanistically, TCF1 repressed several pro-exhaustion factors and induced Bcl6 in CD8 T cells, which promoted the progenitor fate. We propose that the TCF1-Bcl6 axis counteracts type I interferon to repress T cell exhaustion and maintain T cell stemness, which is critical for persistent antiviral CD8 T cell responses in chronic infection. These findings provide insight into the requirements for persistence of T cell immune responses in the face of exhaustion and suggest mechanisms by which effective T cell–mediated immunity may be enhanced during chronic infections and cancer.