Epidemiological evidence suggests that chronic infections impair immune responses to unrelated pathogens and vaccines. The underlying mechanisms, however, are unclear and distinguishing effects on priming versus development of immunological memory has been challenging. We investigated whether bystander chronic infections impact differentiation of memory CD8+ Tcells, the hallmark of protective immunity against intracellular pathogens. Chronic bystander infections impaired development of memory CD8+ Tcells in several mouse models and humans. These effects were independent of initial priming and were associated with chronic inflammatory signatures. Chronic inflammation negatively impacted the number of bystander CD8+ Tcells and their memory development. Distinct underlying mechanisms of altered survival and differentiation were revealed with the latter regulated by the transcription factors T-bet and Blimp-1. Thus, exposure to prolonged bystander inflammation impairs the effector to memory transition. These data have relevance for immunity and vaccination during persisting infections and chronic inflammation.