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T cells follow a triphasic distinct pathway of activation, proliferation and differentiation before becoming functionally and phenotypically “exhausted” in settings of chronic infection, autoimmunity and in cancer. Exhausted T cells progressively lose canonical effector functions, exhibit altered transcriptional networks and epigenetic signatures and gain constitutive expression of a broad coinhibitory receptor suite. This review outlines recent advances in our understanding of exhausted T cell biology and examines cellular and molecular mechanisms by which a state of dysfunction or exhaustion is established, and mechanisms by which exhausted T cells may still contribute to pathogen or tumour control. Further, this review describes our understanding of exhausted T cell heterogeneity and outlines the mechanisms by which checkpoint blockade differentially engages exhausted T cell subsets to overcome exhaustion and recover T cell function.