CD8 T cells lacking effector activity have been recovered from lymphoid organs of mice and patients with progressing tumors. We explored the basis for lack of effector activity in tumor-bearing mice by evaluating Ag presentation and CD8 T cell function in lymphoid organs over the course of tumor outgrowth. Early after tumor injection, cross-presentation by bone marrow-derived APC was necessary for T cell activation, inducing proliferation and differentiation into IFN-γ-producing, cytolytic effectors. At later stages of outgrowth, tumor metastasized to draining lymph nodes. Both cross-and direct presentation occurred, but T cell differentiation induced by either modality was incomplete (proliferation without cytokine production). T cells within tumor-infiltrated nodes differentiated appropriately if Ag was presented by activated, exogenous dendritic cells. Thus, activated T cells lacking effector function develop through incomplete differentiation in the lymph nodes of late-stage tumor-bearing mice, rather than through suppression of previously differentiated cells.