Interleukin(IL)-2 and inflammation regulate effector and memory cytolytic T-lymphocyte (CTL) generation during infection. We demonstrate a complex interplay between IL-2 and inflammatory signals during CTL differentiation. IL-2 stimulation induced the transcription factor eomesodermin (Eomes), upregulated perforin (Prf1) transcription, and repressed re-expression of memory CTL markers Bcl6 and IL-7Rα. Binding of Eomes and STAT5 to Prf1 cis-regulatory regions correlated with transcriptional initiation (increased recruitment of RNA polymerase II to the Prf1 promoter). Inflammation (CpG, IL-12) enhanced expression of IL-2Rα and the transcription factor T-bet, but countered late Eomes and perforin induction while preventing IL-7Rα repression by IL-2. After infection of mice with lymphocytic choriomeningitis virus, IL-2Rα-deficient effector CD8⁺ T cells expressed more Bcl6 but less perforin and granzyme B, formed fewer KLRG-1⁺ and T-bet-expressing CTL, and killed poorly. Thus, inflammation influences both effector and memory CTL differentiation, whereas persistent IL-2 stimulation promotes effector at the expense of memory CTL development.