Cytotoxic T cells that are present in tumors and capable of recognizing tumor epitopes are nevertheless generally impotent in eliciting tumor rejection. Thus, identifying the immune escape mechanisms responsible for inducing tumor-specific CD8⁺ T-cell dysfunction may reveal effective strategies for immune therapy. The inhibitory receptors PD-1 and Tim-3 are known to negatively regulate CD8⁺ T-cell responses directed against the well-characterized tumor antigen NY-ESO-1. Here, we report that the upregulation of the inhibitory molecule BTLA also plays a critical role in restricting NY-ESO-1–specific CD8⁺ T-cell expansion and function in melanoma. BTLA-expressing PD-1⁺Tim-3⁻ CD8⁺ T cells represented the largest subset of NY-ESO-1–specific CD8⁺ T cells in patients with melanoma. These cells were partially dysfunctional, producing less IFN-γ than BTLA⁻ T cells but more IFN-γ, TNF, and interleukin-2 than the highly dysfunctional subset expressing all three receptors. Expression of BTLA did not increase with higher T-cell dysfunction or upon cognate antigen stimulation, as it does with PD-1, suggesting that BTLA upregulation occurs independently of functional exhaustion driven by high antigen load. Added with PD-1 and Tim-3 blockades, BTLA blockade enhanced the expansion, proliferation, and cytokine production of NY-ESO-1–specific CD8⁺ T cells. Collectively, our findings indicate that targeting BTLA along with the PD-1 and Tim-3 pathways is critical to reverse an important mechanism of immune escape in patients with advanced melanoma. Cancer Res; 72(4); 887–96. ©2011 AACR.