We investigated whether inhibitory natural killer cell receptor (iNKR) expression contributes to impaired antigen-specific cytotoxicity and interferon-gamma (IFN-gamma) production by CD8 T cells during chronic infection. iNKR immunoglobulin-like transcript-2 (ILT2/CD85j) is expressed on 40-55% of cytomegalovirus (CMV)-, Epstein-Barr virus (EBV)- and human immunodeficiency virus (HIV)-specific CD8 T cells in both healthy and HIV-infected donors. Other iNKRs (CD158a, b1, e1/e2, k, CD94/NKG2A) are expressed on only a small minority of CD8 T cells and are not preferentially expressed on tetramer-staining virus-specific cells. In normal donors, ILT2 is expressed largely on perforin(+) CD27(-) effector cells. However, in HIV-infected donors, only a third of ILT2(+) cells are also perforin(+). In both normal and HIV-infected donors, ILT2(+) cells are prone to spontaneous apoptosis. Therefore, ILT2 is normally expressed during effector cytotoxic T-lymphocyte (CTL) differentiation, but can also be expressed when effector maturation is incomplete, as in HIV infection. The effect of ILT2 on CD8 cell function was assessed by preincubating effector cells with ILT2 antibody. While blocking ILT2 engagement has no appreciable effect on cytotoxicity, it increases antiviral IFN-gamma production by approximately threefold in both normal and HIV-infected donors. Thus, ILT2 expression, increased on antiviral CD8 cells in chronic infection, may interfere with protective CD8 T-cell function by suppressing IFN-gamma production.