Infection with hepatitis C virus (HCV) is associated with persistence in the majority of individuals. We demonstrate here that the inhibitory molecule programmed death-1 (PD-1) is significantly upregulated on total and HCV-specific CD8⁺ cytotoxic T lymphocytes (CTLs) in the peripheral blood and livers of patients with chronic infection compared to subjects with spontaneous HCV resolution, patients with nonviral liver disease, and normal controls. PD-1 expression on cytomegalovirus-specific CTLs also varies according to HCV status and is highest in patients with chronic infection. HCV-specific CTLs that are PD-1^high express higher levels of the senescence marker CD57 than PD-1^low CTLs, and CD57 expression is greater in chronic than in resolved infection. In vitro blockade of PD-1 by monoclonal antibodies specific to its ligands (PD-L1 and PD-L2) results in restoration of functional competence (proliferation and gamma interferon and interleukin-2 secretion) of HCV-specific CTLs, including those residing in the liver. This reversal of CTL exhaustion is evident even in individuals who lack HCV-specific CD4⁺ T-cell help. Our data indicate that the PD-1/PD-L pathway is critical in persistent HCV infection in humans and represents a potential novel target for restoring function of exhausted HCV-specific CTLs.