During a T cell response, naive CD8 T cells differentiate into effector cells. Subsequently, a subset of effector cells termed memory precursor effector cells further differentiates into functionally mature memory CD8 T cells. The transcriptional network underlying this carefully scripted process is not well understood. In this study, we report that the transcription factor FoxO1 plays an integral role in facilitating effector-to-memory transition and functional maturation of memory CD4 and CD8 T cells. We find that FoxO1 is not required for differentiation of effector cells, but in the absence of FoxO1, memory CD8 T cells displayed features of senescence and progressive attrition in polyfunctionality, which in turn led to impaired recall responses and poor protective immunity. These data suggest that FoxO1 is essential for maintenance of functional CD8 T cell memory and protective immunity. Under competing conditions in bone marrow chimeric mice, FoxO1 deficiency did not perturb clonal expansion or effector differentiation. Instead, FoxO1-deficient memory precursor effector cells failed to survive and form memory CD8 T cells. Mechanistically, FoxO1 deficiency perturbed the memory CD8 T cell transcriptome, characterized by pronounced alterations in the expression of genes that encode transcription factors (including Tcf7), effector molecules, cell cycle regulators, and proteins that regulate fatty acid, purine, and pyramidine metabolism and mitochondrial functions. We propose that FoxO1 is a key regulator that reprograms and steers the differentiation of effector cells to functionally competent memory cells. These findings have provided fundamental insights into the mechanisms that regulate the quality of CD8 T cell memory to intracellular pathogens.