T cell exhaustion is common during chronic infections and can prevent optimal immunity. Although recent studies have demonstrated the importance of inhibitory receptors and other pathways in T cell exhaustion, the underlying transcriptional mechanisms are unknown. Here, we define a role for the transcription factor Blimp-1 in CD8+ T cell exhaustion during chronic viral infection. Blimp-1 repressed key aspects of normal memory CD8+ T cell differentiation and promoted high expression of inhibitory receptors during chronic infection. These cardinal features of CD8+ T cell exhaustion were corrected by conditionally deleting Blimp-1. Although high expression of Blimp-1 fostered aspects of CD8+ T cell exhaustion, haploinsufficiency indicated that moderate Blimp-1 expression sustained some effector function during chronic viral infection. Thus, we identify Blimp-1 as a transcriptional regulator of CD8+ T cell exhaustion during chronic viral infection and propose that Blimp-1 acts as a transcriptional rheostat balancing effector function and T cell exhaustion.