Programmed cell death protein 1 (PD-1) ligation delimits immunogenic responses in T cells. However, the consequences of programmed cell death 1 ligand 1 (PD-L1) ligation in T cells are uncertain. We found that T cell expression of PD-L1 in cancer was regulated by tumor antigen and sterile inflammatory cues. PD-L1⁺ T cells exerted tumor-promoting tolerance via three distinct mechanisms: (1) binding of PD-L1 induced STAT3-dependent ‘back-signaling’ in CD4⁺ T cells, which prevented activation, reduced T_H1-polarization and directed T_H17-differentiation. PD-L1 signaling also induced an anergic T-bet⁻IFN-γ⁻ phenotype in CD8⁺ T cells and was equally suppressive compared to PD-1 signaling; (2) PD-L1⁺ T cells restrained effector T cells via the canonical PD-L1–PD-1 axis and were sufficient to accelerate tumorigenesis, even in the absence of endogenous PD-L1; (3) PD-L1⁺ T cells engaged PD-1⁺ macrophages, inducing an alternative M2-like program, which had crippling effects on adaptive antitumor immunity. Collectively, we demonstrate that PD-L1⁺ T cells have diverse tolerogenic effects on tumor immunity.