Understanding how decidual CD8⁺ T cell (CD8⁺ dT) cytotoxicity is regulated and how these cells integrate the competing needs for maternal–fetal tolerance and immunity to infection is an important research and clinical goal. Gene-expression analysis of effector-memory CD8⁺ dT demonstrated a mixed transcriptional signature of T cell dysfunction, activation, and effector function. High protein expression of coinhibitory molecules PD1, CTLA4, and LAG3, accompanied by low expression of cytolytic molecules suggests that the decidual microenvironment reduces CD8⁺ dT effector responses to maintain tolerance to fetal antigens. However, CD8⁺ dT degranulated, proliferated, and produced IFN-γ, TNF-α, perforin, and granzymes upon in vitro stimulation, demonstrating that CD8⁺ dT are not permanently suppressed and retain the capacity to respond to proinflammatory events, such as infections. The balance between transient dysfunction of CD8⁺ dT that are permissive of placental and fetal development, and reversal of this dysfunctional state, is crucial in understanding the etiology of pregnancy complications and prevention of congenital infections.