The protein encoded by the autoimmune-associated protein tyrosine phosphatase nonreceptor type 22 gene, PTPN22, has wide-ranging effects in immune cells including suppression of T-cell receptor signaling and promoting efficient production of type I interferons (IFN-I) by myeloid cells. Here we show that mice deficient in PTPN22 resist chronic viral infection with lymphocytic choriomeningitis virus clone 13 (LCMV cl13). The numbers and function of viral-specific CD4 T lymphocytes is greatly enhanced, whereas expression of the IFNβ-induced IL-2 repressor, cAMP-responsive element modulator (CREM) is reduced. Reduction of CREM expression in wild-type CD4 T lymphocytes prevents the loss of IL-2 production by CD4 T lymphocytes during infection with LCMV cl13. These findings implicate the IFNβ/CREM/IL-2 axis in regulating T-lymphocyte function during chronic viral infection.