The regulatory circuits dictating CD8⁺ T cell responsiveness versus exhaustion during anti-tumor immunity are incompletely understood. Here we report that tumor-infiltrating antigen-specific PD-1⁺ TCF-1⁻ CD8⁺ T cells express the immunosuppressive cytokine Fgl2. Conditional deletion of Fgl2 specifically in mouse antigen-specific CD8⁺ T cells prolongs CD8⁺ T cell persistence, suppresses phenotypic and transcriptomic signatures of T cell exhaustion, and improves control of the tumor. In a mouse model of chronic viral infection, PD-1⁺ CD8⁺ T cell-derived Fgl2 also negatively regulates virus-specific T cell responses. In humans, CD8⁺ T cell-derived Fgl2 is associated with poorer survival in patients with melanoma. Mechanistically, the dampened responsiveness of WT Fgl2-expressing CD8⁺ T cells, when compared to Fgl2-deficient CD8⁺ T cells, is underpinned by the cell-intrinsic interaction of Fgl2 with CD8⁺ T cell-expressed FcγRIIB and concomitant caspase 3/7-mediated apoptosis. Our results thus illuminate a cell-autonomous regulatory axis by which PD-1⁺ CD8⁺ T cells both express the receptor and secrete its ligand in order to mediate suppression of anti-tumor and anti-viral immunity.