CD8+ memory T cells are abundant, and are activated in a near-synchronous manner by infection, thereby providing a unique opportunity to evaluate the coordinate functional and phenotypic changes that occur in vivo within hours of viral challenge. Using two disparate virus challenges of mice, we show that splenic CD8+ memory T cells rapidly produced IFNγ in vivo, but, within 18–24 hours, IFNγ synthesis was terminated, and remained undetectable for ≥48 hours. A similar on/off response was observed in CD8+ memory T cells in the peritoneal cavity. Cessation of IFNγ production in vivo occurred despite the continued presence of immunostimulatory viral antigen, indicating that the initial IFNγ response had been actively down-regulated and that the cells had been rendered refractory to subsequent in vivo antigen contact. Down-regulation of IFNγ synthesis was accompanied by the upregulation of inhibitory receptor expression on the T cells, and ex vivo analyses using synthetic peptides revealed a concurrent hierarchical loss of cytokine responsiveness (IL-2, then TNF, then IFNγ) taking place during the first 24 hours following antigen contact. Thus, within hours of virus challenge, CD8+ memory T cells display the standard hallmarks of T cell exhaustion, a phenotype that has previously been associated only with chronic diseases, and that is generally viewed as a gradually-developing and pathological change in T cell function. Our data suggest that, instead, the “exhaustion” phenotype is a rapid and normal physiological T cell response.